Oil edges lower as supplies tighten amid weak demand signs in China

By Sibel Morrow

Oil prices edged lower on Tuesday after traders cashed out on high prices over tightening market supplies a day before the OPEC+ voluntary cuts come online, while persistent demand fears in China blunted the price momentum.

International benchmark Brent crude traded at $85.24 per barrel at 10.10 a.m. local time (0710 GMT), a 0.22% loss from the closing price on Monday of $85.43 per barrel.

The American benchmark West Texas Intermediate (WTI) traded at the same time at $81.64 per barrel, down 0.19% from the session close of $81.80 per barrel on Monday.

Brent oil traded over $85 a barrel in late trade as investors bet on tightening market supply ahead of the voluntary cuts by Saudi Arabia, Russia, and Algeria on Aug. 1.

Producers of the 23-member OPEC+ group had pledged to reduce their output "to ensure market stability" amid weak demand signs in China, with a possible extension beyond August.

However, the Chinese National Bureau of Statistics (NBS) reported restricted growth on Monday, further fueling demand fears.

Analysts say the Saudi cutback of 1 million barrels per day may be extended for at least another month if the world’s largest oil importer and second-largest oil consumer, China, continues to post weak economic data.