LONDON: Oil prices gave up the previous day’s gains on Tuesday as weak Chinese demand offset U.S. supply disruptions from Tropical Storm Francine and global oil oversupply risks that continue to weigh on the market.
Brent crude futures were down 79 cents, or 1.1%, at $71.05 a barrel by 0948 GMT. U.S. West Texas Intermediate crude lost 82 cents, or 1.2%, to $67.89.
Both benchmarks had risen about 1% on Monday.
The U.S. Coast Guard ordered the closure of all operations at Brownsville and other small Texas ports on Monday evening as Tropical Storm Francine barrelled across the Gulf of Mexico. Corpus Christi port remained open with restrictions.
The tropical storm is forecast to strengthen significantly and become a hurricane on Tuesday, according to the National Hurricane Center (NHC).
Exxon Mobil said it shut in output at its Hoover offshore production platform while Shell paused drilling operations at two platforms. Chevron also began shutting in oil and gas output at two of its offshore platforms.
However, signs of weakening global demand and expectations of oil oversupply kept the market suppressed.
Chinese data on Monday showed consumer inflation accelerated in August to its fastest in half a year, though domestic demand remained fragile, and producer price deflation worsened.
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And while data released on Tuesday showed China’s exports grew at their fastest in nearly 1-1/2 years in August, imports disappointed against a backdrop of depressed domestic demand.
“The message from China is simple but loud and reverberates throughout the globe,” said PVM Oil analyst Tamas Varga, adding that the country is struggling to encourage spending and boost sluggish demand.
Later in the day, markets will be watching for the monthly oil market report from the Organization of the Petroleum Exporting Countries (OPEC).
The U.S. Energy Information Administration is also due to publish its short-term energy outlook, with forecasts for the global market and U.S. crude oil output.
Source: Brecorder
