©Reuters. FILE PHOTO: Crude oil storage tanks seen from above at the Cushing Oil Hub, in Cushing, Oklahoma, March 24, 2016. REUTERS/Nick Oxford/File Photo/File Photo
By Arathy Somasekhar
HOUSTON (Reuters) – Crude oil prices fell on Tuesday on concerns about a global economic slowdown and as preliminary data pointed to a larger-than-expected buildup in US oil inventories.
Brent futures for March delivery fell $2.06, or 2.3%, to $86.13 a barrel. fell $1.49, or 1.8%, to $80.13 a barrel.
US business activity contracted for the seventh straight month in January, although the downturn in both manufacturing and services moderated for the first time since September and business confidence rose as the new year began.
The U.S. economy “may still tip over and some energy traders are still skeptical about how quickly China’s crude oil demand will recover this quarter,” OANDA analyst Edward Moya said in a note.
Eurozone business activity made a surprising return to modest growth in January, according to S&P Global’s (NYSE:) flash Composite Purchasing Managers’ Index (PMI). Yet economic activity in the UK private sector fell at its fastest pace in two years.
Economies in the six-member Gulf Cooperation Council (GCC) will grow this year at half the pace of 2022 as oil revenues take a hit from an expected mild global slowdown, according to the median opinion of a Reuters poll of economists .
Crude oil inventories rose about 3.4 million barrels in the week ending Jan. 20, according to market sources who cited figures from the American Petroleum Institute on Tuesday. That was triple the forecast of about 1 million in a preliminary Reuters poll on Monday.
Official data from the US Energy Information Administration will be released Wednesday at 10:30 am (1530 GMT).
Meanwhile, an OPEC+ panel is likely to approve the producer group’s current oil production policies when it meets next week, five OPEC+ sources said Tuesday, as hopes of higher Chinese demand fueling an oil price rally are offset by concerns about inflation and a global economic downturn. crisis. to slow down
Bank JP Morgan raised its forecast for China’s crude oil demand, but maintained its forecast for an average 2023 price of $90 per barrel for .
“Without major geopolitical events, it would be difficult for the oil price to cross $100 in 2023 as there should be more supply than demand this year,” the analyst report said.
Crude oil prices in brick-and-mortar markets have started the year with an increase in purchases from China following the easing of pandemic controls and concerns from traders that sanctions against Russia could limit supply.
US oilfield services company Halliburton (NYSE:) Co said its shale oil well fracking equipment remains fully booked with oil prices encouraging more drilling.
Investors have also turned back to petroleum futures and options in more than two years as concerns about a global economic downturn have eased.