U.S. crude prices on Tuesday fellow below $78 a barrel to hit the lowest point since July as weak global economic data overshadowed concerns that the Israel-Hamas war could erupt into a broader regional conflict.
West Texas Intermediate was down $2.98, or 3.58%, at $77.93 a barrel, while Brent fell $3.00, or 3.52%, to $82.18, both their lowest prices since July.
The drop comes after China reported mixed economic data.
Beijing’s crude oil imports rose by volume and value in October, but the country’s overall exports fell more than expected, indicating softening global demand.
The world’s second largest economy reported a 6.4% drop in exports in U.S. dollar terms for October compared to the same period a year ago, worse than the 3.3% drop predicted by a Reuters poll.
China’s exports have fallen for six consecutive months now, as a higher interest rates put downward pressure on the global economy. Minneapolis Federal Reserve President Neel Kashkari lowered expectations Tuesday that the U.S. central bank might cut rates.
“We have to get inflation back down to 2% over a reasonable period of time. Ultimately the economy will tell us how much is needed to get there and I just don’t know,” Kashkari told Bloomberg Television.
The data out of China offset the impact of Saudi Arabia’s and Russia’s oil output cuts, which lifted oil prices higher earlier in the week. Riyadh and Moscow confirmed on Sunday that they would keep those cuts in place through at least the end of the year.
Oil prices had spiked in the week following Hamas’ devastating terrorist attacks on Israel on concerns that the war could escalate into a broader regional conflict that disrupts oil supply.
Prices have fallen since mid-October as worries of the conflict spreading in the immediate term have eased.
This is a developing story. Please check back for updates.