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Oil prices fell Tuesday on demand worries as weak PMI data from Asia and Europe revived worries about global growth and fuel demand.
Benchmark Brent crude futures dropped half a percent to $84.94 a barrel, while WTI crude futures were down 0.6 percent at $81.28.
However, both Brent and WTI contracts held near three-month highs on signs of tightening global supply and hopes of increased demand through the rest of this year. The voluntary output cuts announced by Saudi Arabia and Russia have come into effect from today.
Traders also remain hopeful that Saudi Arabia will extend voluntary output cuts into September and tighten the global supply even further.
A private survey showed today that factory activity in China, the world’s largest importer of crude, fell into contraction territory for the first time since April.
Another report showed that average new home prices in 100 Chinese cities fell for a third consecutive month in July.
Japan, South Korea, Taiwan and Vietnam also saw manufacturing activity contracting in July, raising fresh concerns about Asia’s fragile economic recovery.
In Europe, the HCOB Eurozone Manufacturing PMI fell to 42.7 in July from 43.4 in the previous month, marking the lowest in three years.
U.K. factory output fell at the fastest pace in seven months in July, hit by higher interest rates while British retail sales fell in July at the fastest rate since April 2022, separate reports showed.
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