Oil was down Tuesday morning in Asia, continuing Monday’s losses as the fragile state of the global economic recovery from COVID-19 impacts the fuel demand outlook.
Brent oil futures fell 0.77% to $70.94 by 11:38 PM ET (3:38 AM GMT), but remained above the $70-mark. WTI futures were down 0.74% to $68.72.
Investor worries were heightened by trade data from China, the world’s top oil importer, released on Monday. Imports grew 51.1% year-on-year in May, below the 51.5% in forecasts prepared by Investing.com but higher than April’s 43.1% growth.
“Chinese oil imports at a five-month low… would tend to confirm weakness in the Asia market,” Mizuho Securities director of energy futures Bob Yawger told Reuters.
Investors also await the outcome of talks between Iran and world powers to revive a 2015 nuclear deal and potentially re-add Iranian crude to the global supply. Discussions are scheduled to resume in Vienna on Jun. 10.
The black liquid has seen a rally in recent weeks, with Brent futures climbing almost 40% in the year to date. Fuel demand optimism grew as some countries saw falling numbers of COVID-19 cases and rolled out vaccination programs.
Also boosting prices was the Organization of the Petroleum Exporting Countries and allies (OPEC+)’s reiterated decision to keep supply restrained at its meeting earlier in the month.
However, the optimism has been dampened by waves of COVID-19 cases in countries such as India, the world’s third-largest oil importer.
Investors now await crude oil supply data from the American Petroleum Institute, due later in the day.