Oil prices slip on China demand concerns, waning Middle East worries

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Oil prices slip on China demand concerns, waning Middle East worries

By Colleen Howe

BEIJING (Reuters) – Oil prices slipped in early ****** trading on Tuesday, extending losses from the previous session, over concerns about ******** demand and as the market shrugged off the risk of conflict escalating in the Middle East.

Brent crude oil futures fell by 12 cents or 0.15% to $79.78 a barrel by 0033 GMT. U.S. crude futures were down 14 cents, or 0.18%, at $75.67 a barrel.

A raft of disappointing economic news out of China has shaken markets recently. China’s manufacturing activity likely shrank for a third month in July, a Reuters poll showed on Monday.

Also on Monday, Citi cut China’s growth forecast to 4.8% from 5% after its growth missed analyst estimates in the second quarter, noting that economic activity softened further in July.

The market is watching an upcoming meeting of China’s top decision-making body, the Politburo, expected to take place this week, that could elicit further economic policy support.

But expectations are limited after the Third Plenum, a key policy meeting in mid-July, largely reiterated existing economic policy goals and ******* to lift market sentiment.

Oil fell 2% in the previous trading session after ******* signalled that its response to a Hezbollah rocket strike in ********-occupied Golan Heights on Saturday would be calculated to avoid dragging the Middle East into an all-out war.

That was reinforced by a U.S. diplomatic push, reported by Reuters on Monday, to constrain *******’s response and prevent it from striking either the Lebanon capital of Beirut or any major civilian infrastructure in retaliation.

In Venezuela, the opposition said it had won 73% of the vote, despite the national electoral authority having declared incumbent Nicolas Maduro the winner of the election, giving him a third term in office.

“Nicolas Maduro’s victory in the latest Venezuelan election is a headwind for global supply, as this could result in tighter US sanctions,” ANZ analysts said in a note, estimating that could cut Venezuela’s exports by 100,000-120,000 barrels per day.

Governments in Washington and elsewhere cast doubt on the results and called for a full tabulation of votes, and protesters gathered in towns and cities across Venezuela on Monday.

(Reporting by Colleen Howe; Editing by Sonali Paul)

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