Oil benchmark Brent edged lower on Wednesday as concern over a global economic slowdown overshadowed supply cuts announced this week by top crude exporters Saudi Arabia and Russia, Reuters reports.
Brent crude was down 64 cents, or 0.8 per cent, at $75.61 a barrel by 0913 GMT, having risen by $1.60 on Tuesday.
U.S. West Texas Intermediate crude traded at $70.71, up 92 cents, or 1.3 per cent from Monday’s close. Given there was no settlement on Tuesday because of the Independence Day holiday, trade on Wednesday appeared to narrow the spread between the benchmarks, with WTI catching up with Brent’s gains the previous day.
“These measures are designed to push oil prices higher, but currently they are being pulled down by macroeconomic anxiety,” PVM analyst Tamas Varga said of the price impact from the supply cuts.
“Some would argue that the latest decision to supply less oil to the market is actually bearish because it can be viewed as an admission that demand is struggling to grow at a healthy clip due to global economic headwinds.”
Recent business surveys have shown a slump in global factory activity, reflecting sluggish demand in China and Europe.
On Wednesday a private sector survey showed China’s services activity in June expanded at the slowest pace in five months as weakening demand weighed on post-pandemic recovery momentum.
Saudi Arabia, the world’s biggest crude exporter, on Monday said it would extend its voluntary output cut of 1 million barrels per day to August. Russia and Algeria, meanwhile, are lowering their August output and export levels by 500,000 bpd and 20,000 bpd respectively.
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