© Reuters. FILE PHOTO: A view shows oil tanks of oil pipeline operator Transneft at the Kozmino crude oil terminal on the shore of Nakhodka Bay near the port city of Nakhodka, Russia, on 12 August 2022. REUTERS/Tatiana Meel
By Stephanie Kelly
NEW YORK (Reuters) – Oil prices fell about 3 percent on Tuesday to their lowest level since before Russia’s invasion of Ukraine, as economic data fueled concerns about a possible global recession , as the market awaited clarity on talks to revive a deal that could allow more Iranians. oil exports.
futures fell $2.76, or 2.9%, to settle at $92.34 a barrel. The contract hit a session low of $91.71 a barrel, the lowest since February 18.
West Texas Intermediate (WTI) crude lost $2.88, or 3.2%, to settle at $86.53 a barrel. The benchmark fell to a session low of $85.73 a barrel, the lowest since Jan. 26.
Contracts fell about 3% in their previous sessions.
The European Union is assessing Iran’s response to what the bloc has called its “final” proposal to save the 2015 nuclear deal and is consulting with the United States, an EU spokesman said on Tuesday.
Iran responded to the proposal late Monday, but neither side provided any details.
“It’s still not clear what Iran said to the European Union last night, so some complicated elements may affect the outcome of the nuclear deal,” said UBS analyst Giovanni Staunovo.
Weak economic indicators weighed on prices.
U.S. homebuilding fell to the lowest level in nearly 1-1/2 years in July, weighed down by higher mortgage rates and building material prices, suggesting the housing market it could contract further in the third quarter.
“Oil traders reacted because of concerns about an economic slowdown and housing uses for energy,” said Phil Flynn, analyst at Price Futures Group. “That took us by surprise.”
China’s central bank cut lending rates to try to revive demand as the country’s economy unexpectedly slowed in July after Beijing’s zero-Covid policy and a housing crisis slowed factory and retail activity.
State media quoted Premier Li Keqiang as saying that China will reasonably step up macro policy support for the economy.
Barclays ( LON: ) cut its Brent price forecasts by $8 a barrel for this year and next as it expects a large short-term surplus due to “resilient” Russian supplies.
Market participants awaited industry data on US oil inventories due later on Tuesday. Crude and gasoline inventories likely fell last week, while distillate inventories rose, a preliminary Reuters poll showed on Monday. [EIA/S]