By Colleen Howe
BEIJING, Dec 16 (Reuters) – Oil prices fell in early trading on Tuesday, adding to the previous session’s losses, as prospects for a Russia-Ukraine peace deal appeared to strengthen, raising expectations of a potential easing of sanctions.
Brent crude futures fell 24 cents, or 0.40%, to $60.32 a barrel by 0101 GMT, and U.S. West Texas Intermediate crude was trading at $56.60 a barrel, down 22 cents, or 0.39%.
The U.S. offered to provide NATO-style security guarantees for Ukraine at talks with the country’s president in Berlin, U.S. officials said, an unprecedented step that sparked optimism in some European capitals that talks were drawing closer to negotiating an end to the conflict.
“Adding to the pressure, soft Chinese economic data released overnight further fuelled concerns that global demand may not be strong enough to absorb recent supply growth,” IG market analyst Tony Sycamore said in a note.
China’s factory output growth slowed to a 15-month low, official data showed on Monday. Retail sales also grew at their slowest pace since December 2022, during the COVID-19 pandemic.
The data raised concerns that China’s strategy of relying on exports to offset weak domestic demand may be faltering. A cooling economy would further pressure demand in the world’s largest buyer of oil, where the surging use of electric vehicles is already weighing on petroleum consumption.
Those factors offset concerns about supply after the U.S. seized an oil tanker off the coast of Venezuela last week.
Traders and analysts said a glut of floating storage and a surge in Chinese buying from Venezuela in anticipation of sanctions are also limiting the market impact of the move.
(Reporting by Colleen Howe; Editing by Muralikumar Anantharaman)
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