WionDrive News Desk 
Oil prices declined on Tuesday, driven lower by concerns over sluggish demand from China, while market attention shifted to the US Federal Reserve’s policy meeting concluding on Wednesday.
Brent crude futures for November delivery fell 48 cents, or 0.66%, to USD 72.27 per barrel by 1002 GMT. Similarly, US crude futures for October dropped 37 cents, or 0.53%, to USD 69.72 per barrel.
Charalampos Pissouros, a senior investment analyst at brokerage XM, noted that oil prices had recently been recovering due to supply concerns related to Hurricane Francine in the US Gulf of Mexico and expectations of reduced US crude stockpiles. However, Pissouros pointed out that the current pullback in prices reflects growing concerns about weakening global demand, particularly from China.
Data released on Saturday revealed that China’s oil refinery output decreased for the fifth consecutive month in August, driven by declining fuel demand and weak export margins. This ongoing slump in Chinese demand has overshadowed the recent disruptions in US oil production. Hurricane Francine has left more than 12% of crude production and 16% of natural gas output in the US Gulf of Mexico offline, according to the US Bureau of Safety and Environmental Enforcement (BSEE).
Adding to market dynamics is the Federal Reserve’s anticipated decision on interest rates. Fed funds futures indicate a 69% probability that the central bank will reduce rates by 50 basis points during its meeting. Panmure Liberum analyst Ashley Kelty noted that while a rate cut could potentially boost oil demand by supporting economic growth, recent weak economic data and hawkish comments from Fed members have fueled speculation that the move might be more aggressive than expected.
Additionally, investors are awaiting a report on US crude inventories, with a Reuters poll suggesting a likely decrease of about 200,000 barrels for the week ending September 13.
In summary, while US production disruptions have provided some support for oil prices, weakening demand from China and uncertainty surrounding US monetary policy are currently exerting downward pressure on the market.
