Oil prices moved slightly in Asian trading on Tuesday, stabilizing after sharp declines in previous sessions, as markets remained concerned about rising production and weakening demand amid escalating global economic challenges.
U.S. threats to impose additional sanctions on buyers of Russian oil failed to halt the decline in crude prices. Adding to the pressure was a stronger U.S. dollar, although its impact was partially offset by weaker-than-expected U.S. economic data.
Brent crude futures slipped 0.1% to $68.72 per barrel, while West Texas Intermediate (WTI) fell by a similar margin to $65.23, as fears persisted over an oversupplied market and slowing global demand.
The drop in prices followed an agreement over the weekend by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to raise output by 547,000 barrels per day for the second consecutive month. This move is part of a broader plan to unwind production cuts that have lasted for three years and to regain a larger share of the global oil market. The decision signals an expected increase in supply in the coming months, despite growing concerns about demand erosion amid a slowdown in global economic growth.
Weak U.S. employment data has further deepened these fears, especially regarding a potential decline in fuel demand from the world’s largest oil consumer. At the same time, trade policies particularly tariffs imposed by U.S. President Donald Trump have added a layer of uncertainty over the future of the U.S. economy.
Additionally, downbeat manufacturing PMI data from China, the world’s largest oil importer, weighed on prices as it showed a contraction in industrial activity that exceeded expectations in recent periods.
On the other hand, oil prices received some limited support last week following Trump’s threats to impose additional sanctions on key buyers of Russian oil, including China and India. These steps are part of an escalating strategy to curb Russia’s oil revenues amid the ongoing war in Ukraine. Trump had previously imposed a 25% tariff on India and warned of tougher measures if it did not halt purchases of Russian crude remarks he reiterated on Monday, which gave prices a minor lift amid expectations that supply may tighten if sanctions are enforced.
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