A pump jack is seen at sunrise on October 14, 2014 near Bakersfield, California. REUTERS/Lucy Nicholson/File Photo Get license rights
Aug 22 (Reuters) – Oil prices fell on Tuesday as investors focused on the possibility that China’s economic slowdown will dampen demand from the world’s top crude importer.
Brent crude was down 43 cents, or 0.5%, at $84.03 a barrel, while the most volatile U.S. West Texas Intermediate October contract was down 48 cents at $79.64.
The front-month WTI contract was down 37 cents at $80.35 a barrel ahead of its immediate expiration.
China, the world’s second-largest economy, is seen as key to boosting oil demand later in the year. Its lackluster economic activity has frustrated markets as promised stimulus fell short of expectations, including a smaller-than-expected cut in a key credit benchmark on Monday.
“Saudi and Russian production cuts have largely been negated by weakening Chinese crude demand, which picked up last month and is likely to continue into late summer,” said Jim Ritterbusch, president of Ritterbusch and Associates LLC in Galena, Illinois.
Adding to demand concerns, US Federal Reserve officials have not ruled out further interest rate hikes to curb inflation.
Market sources cited data from the American Petroleum Institute on Tuesday, which saw a decline of about 2.4 million barrels in the week ended Aug. 18.
Iraqi and Turkish oil ministers discussed the importance of resuming oil flows after the completion of pipeline maintenance work, Iraqi state news agency reported, which would increase global supplies.
Turkey halted Iraq’s export of 450,000 barrels (bpd) in March – roughly 0.5% of world supply – through the northern Iraq-Turkey pipeline after an International Trade Federation arbitration ruling.
“Such a resumption of exports could add nearly half a million barrels per day to global oil supplies by having a significant impact on Saudi Arabia’s additional production cuts, which are expected to extend into next month,” Ritterbusch said.
Separately on Monday, Shell ( SHEL.L ) said it was investigating a possible spill in the 180,000 bpd Trans-Niger oil pipeline.
Additional reporting by Natalie Grover and Paul Carsten in London, Muyu Xu in Singapore and Katya Golubkova in Tokyo; Editing by Thomas Janowski, David Evans, David Goodman, David Gregorio and Cynthia Osterman
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