By Adedapo Adesanya
The Brent crude lost $2.76 or 2.9 per cent to settle at $92.34 per barrel on Tuesday as economic data spurred concerns about a potential global recession, while the market awaited clarity on talks to revive a deal that could allow more Iranian oil exports.
Also, these concerns depleted the price of the United States West Texas Intermediate crude (WTI) by $2.88 or 3.2 per cent to $86.53 a barrel.
The slide in prices indicated the lowest for oil before Russia’s invasion of Ukraine almost six five months ago.
Weak economic indicators from the world’s top economies continue to weigh on prices.
In the US, homebuilding fell to the lowest level in nearly 1-1/2 years in July, weighed down by higher mortgage rates and prices for construction materials, suggesting the housing market could contract further in the third quarter.
The housing market’s declining fortunes bring fears of a broader economic recession back into focus, which could impact oil demand.
Analysts also noted that oil traders reacted because of concerns about an economic slowdown and housing uses energy.
The US Federal Reserve is expected to stay on its aggressive monetary policy tightening path.
China’s central bank cut lending rates to try to revive demand as the nation’s economy slowed unexpectedly in July after the country’s zero-COVID policy and a property crisis slowed factory and retail activity.
Also weighing on prices, the European Union is assessing Iran’s response to what the bloc has called its “final” proposal to save a 2015 nuclear deal, and consulting with the US.
Iran had responded to the proposal late on Monday but none of the parties provided any details.
The American Petroleum Institute (API) reported a draw this week for crude oil of 448,000 barrels, while analysts predicted a smaller draw of 117,000 barrels.
The draw comes as the Department of Energy released 3.4 million barrels from the Strategic Petroleum Reserves in the week ending August 12, to 461.2 million barrels.
US crude inventories have shed some 61 million barrels since the start of 2021, with a 1.7 million barrel gain since the start of 2020, according to API data.
Market participants will await the official industry data on US oil inventories expected later on Wednesday.
Modupe Gbadeyanka