Oil prices fell by around one percent on Tuesday as signs of a spreading global economic slowdown stoked concerns over future fuel demand.
International Brent crude oil futures were at $62.09 per barrel at 0601 GMT, down 65 cents, or 1 percent, from their previous close.
U.S. West Texas Intermediate (WTI) crude futures were at $53.22 per barrel, down 1.1 percent, or 58 cents.
China’s state planner on Tuesday warned that the downward pressure on the economy will affect China’s job market as falling factory orders point to a further drop in activity in coming months and more job shedding.
On Monday, China reported its lowest annual economic growth since 1990.
“Slowing manufacturing activity in China is likely weighing on demand,” said Singapore-based tanker brokerage Eastport, adding that industrial slowdowns tended to be leading indicators that fed gradually into lower demand for shipped oil products.
In a sign of spreading economic weakness, South Korea’s export-oriented economy slowed to a six-year low growth rate of 2.7 percent in 2018, official data showed on Tuesday.
This came after the International Monetary Fund on Monday trimmed its 2019 global growth forecast to 3.5 percent, down from 3.7 percent in last October’s outlook.
“After two years of solid expansion, the world economy is growing more slowly than expected and risks are rising,” IMF Managing Director Christine Lagarde told reporters.
Despite the darkening outlook, oil prices have been getting some support from supply cuts started in late 2018 by the Organization of the Petroleum Exporting Countries (OPEC).
“The effects of OPEC-led cuts … will undoubtedly place a price floor under crude oil,” said Singapore-based brokerage Phillip Futures on Tuesday. – Reuters