Oil prices steadied near $74 a barrel on Tuesday as the top U.S. diplomat renewed efforts to push for a ceasefire in the Middle East and as slowing demand growth in China, the world’s top oil importer, continued to weigh.
Brent crude futures for December delivery were down 20 cents, or 0.27%, at $74.09 at 0855 GMT. U.S. West Texas Intermediate crude futures for November delivery were 20 cents lower at $70.36 a barrel on the contract’s last day as the front month.
The more actively traded WTI futures for December delivery, which will soon become the front month, fell 22 cents, or 0.3%, to $69.82 per barrel.
Both Brent and WTI settled nearly 2% higher on Monday, recouping some of last week’s more than 7% decline, with no letup of fighting in the Middle East and the market still nervous about Israel’s expected retaliation against Iran potentially leading to a disruption of oil supply.
U.S. Secretary of State Antony Blinken arrived in Israel on Tuesday, the first stop on a Middle East tour in which he will seek to revive talks to end the Gaza war and defuse the spillover conflict in Lebanon.
“Crude oil prices have been fluctuating in response to mixed news from the Middle East, as the situation alternates between escalation and de-escalation,” Satoru Yoshida, a commodity analyst at Rakuten Securities, said.
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The market continues to weigh the impact of Beijing’s stimulus measures and improved U.S. economic activity but gains will likely remain limited by persistent uncertainty about the overall global economic outlook, he added
Data on Friday showed China’s economy grew at the slowest pace since early 2023 in the third quarter, fuelling growing concerns about oil demand.
China’s oil demand growth is expected to remain weak in 2025 despite recent stimulus measures from Beijing as the world’s No. 2 economy electrifies its car fleet and grows at a slower pace, the head of the International Energy Agency said on Monday.
Still, Saudi Aramco (2222.SE), opens new tab is “fairly bullish” on China’s oil demand especially in light of the government’s stimulus package which aims to boost growth, the head of the state-owned Saudi oil giant said on Monday.
Also contributing to the downward pressure on the oil market was U.S. dollar strength driven by a gradual easing of global inflation, said Priyanka Sachdeva, senior analyst at brokerage Phillip Nova.
A stronger dollar normally weighs on oil prices as it makes the greenback-priced commodity more expensive for non-dollar holders to buy.
U.S. crude oil stockpiles likely rose last week, while distillate and gasoline inventories were seen down, a preliminary Reuters poll showed.