Oil prices slightly declined on Tuesday due to weak Chinese economic data and market caution ahead of the U.S. Federal Reserve’s interest rate decision. West Texas Intermediate crude fell to $70.60 per barrel, and Brent crude eased to $73.85. The dip follows last week’s 6% price rally and disappointing Chinese consumer spending data, despite solid industrial output.
Markets anticipate a 25-basis-point rate cut by the Fed, with potential surprises from the meeting possibly influencing oil prices. Lower rates could boost economic growth and oil demand. However, rising non-OPEC+ supplies, particularly from the U.S. and Brazil, and slowing demand, especially in China, cast uncertainty on 2024’s oil outlook.
The International Energy Agency forecasts a 950,000-barrel-per-day supply surplus next year, even with OPEC+ production cuts. Meanwhile, new EU sanctions targeting Russia’s “shadow fleet” are unlikely to cause major disruptions, as most Russian flows now avoid Western services.