SINGAPORE (Reuters) – Oil prices were little changed on Tuesday as strong supply prospects and strong global demand growth outweighed concerns that growing tensions in the Middle East could have a knock-on effect from the key exporting region.
Futures for December delivery rose 7 cents, or 0.1%, to $71.77 a barrel as of 0335 GMT. US West Texas Intermediate crude futures for November delivery gained 8 cents, or 0.12%, to $68.25.
On Monday, Brent futures ended September down 9%, its third month of decline and the biggest monthly decline since November 2022. It fell 17% in the third quarter for its biggest quarterly loss in a year. WTI fell 7% last month and is down 16% for the quarter.
“There have been many reservations in oil prices, as market participants look to the upcoming additions from OPEC+ later this year, and the still soft outlook for demand from China reflected in the country's latest PMI numbers,” it said. Yeap Jun Rong, market strategist at IG.
“That said, sentiment was less sensitive to the weak data, finding some stability on hopes that the recent recovery could help boost the economy ahead,” Yeap said.
China's manufacturing activity fell sharply in September as new orders at home and abroad cooled, reducing factory owner confidence to record lows, a private sector survey said on Monday.
Analysts say a slew of stimulus measures this past week may be enough to restore China's growth in 2024 to 5% after under-forecast data a few months ago cast doubt on that target, but it won't change for long. the idea.
In line with demand concerns, OPEC+, which includes OPEC members and allies such as Russia, is set to increase output by 180,000 barrels per day in December.
Meanwhile, tensions in the Middle East remain on the radar, but supply fears appear to be contained for now, as market participants are still pricing in the risks of wider regional conflict, IG's Yeap said.
Israel's much-anticipated ground attack on Lebanon appeared to be moving forward on Tuesday as the military said the military had launched “limited” attacks on Hezbollah targets in the border area.
The attack follows Israel's killing on Friday of Hezbollah chief Hassan Nasrallah, and represents an escalating conflict in the Middle East between Israel and Iran-backed militants that are now threatening to feed the US and Iran.
In the US, oil stocks were expected to fall last week by about 2.1 million barrels in the week to September 27, a preliminary Reuters survey showed on Monday.
The survey was conducted ahead of a report by industry group the American Petroleum Institute due at 4:30 pm EDT (2030 GMT) on Tuesday.
