Oil prices slipped on Tuesday as recession concerns and worsening COVID-19 outbreaks in top crude importer China heightened fears of lower fuel demand.
Brent crude fell 84 cents, or 0.9%, to US$97.08 a barrel by 1006 GMT while U.S. West Texas Intermediate (WTI) crude fell 96 cents, or 1%, to US$90.83.
Both benchmarks hit their highest since August on Monday amid reports that leaders in China were weighing an exit from the country’s strict COVID-19 restrictions.
However, new coronavirus cases have surged in Guangzhou and other Chinese cities, official data showed on Tuesday.
Market participants will also be eyeing U.S. CPI data on Friday, CMC Markets analyst Tina Teng said.
“On the back of sticky inflation and rising interest rates in major western countries, oil futures are still pricing in the possibility of a global economic recession,” said Teng.
On the supply side, bullish signals remain in the near term.
The European Union ban on Russian oil, imposed in retaliation for Russia’s invasion of Ukraine, is set to start on 5 December and will be followed by a halt on oil product imports in February. Moscow calls its actions in Ukraine “a special operation”.
U.S. crude oil stocks were expected to have risen by about 1.1 million barrels last week, a preliminary Reuters poll showed on Monday.
The poll was conducted ahead of reports from the American Petroleum Institute due at 4:30 p.m. ET (2130 GMT) on Tuesday and the Energy Information Administration at 10:30 a.m. (1530 GMT) on Wednesday.