Investing.com – oil futures fell Tuesday, continuing recent losses, on concerns over a potential slowdown in demand from China, a major importer, coupled with the possibility of increased supply from leading producers.
By 07:35 EST (11:35 GMT), Nymex crude oil futures were down 1.5% to $72.44 a barrel, while the contract fell 2.2% to $75.81 a barrel.
Weak Chinese growth weighs
Crude markets have been on the retreat for the last three weeks, largely on concerns that demand in China, the world’s largest importer, will struggle to grow for the remainder of this year as its economy struggles with the impact of a prolonged property crisis.
China reported weaker-than-expected manufacturing PMI over the weekend, and on Monday China reported new export orders fell for first time in eight months in July and that prices of new homes rose in August at their weakest pace this year.
Libyan supply hit
Oil exports from key Libyan ports were suspended on Monday, and production was reduced nationwide due to an ongoing dispute between rival political groups over the management of the central bank and oil revenue.
This disruption led Libya’s National Oil Corp. (NOC) to declare force majeure on the El Feel oil field, effective since September 2.
Despite these disruptions, experts suggest that the impact may be limited. Libya’s Arabian Gulf Oil Company managed to resume production at approximately 120,000 barrels per day on Sunday, aimed at powering the Hariga port’s power plant.
OPEC+ to unwind cuts?
Traders are also waiting for supply news from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, with the group scheduled to start adding output back to the market, starting in October, gradually unwinding the hefty cuts they have introduced to try and prop up the market.
“Given lingering demand concerns there had been a growing part of the market … who thought the group would delay any supply increases. The group may believe that supply disruptions from Libya provide an opportunity to increase supply,” said analysts at ING, in a note.
(Senad Karaahmetovic contributed to this article.)