Oil prices fall, rebound runs out of steam on demand worries

A pump jack operates in an oil field near Corpus Christi, Texas, U.S., on Thursday, Jan. 7, 2016. (Getty Images)

SULAIMANI (ESTA) — Crude oil prices reversed course after an early bounce on Tuesday, as concerns over coronavirus curbs combined with slowing activity in key markets weighed on sentiment.

Brent crude oil futures shed 12 cents to $72.77 a barrel at 0632 GMT while U.S. West Texas Intermediate (WTI) crude was down 9 cents at $71.17 per barrel.

Both markets dropped more than 3% on Monday, according to Reuters.

ANZ analysts in a note highlighted resurgent economic risks to major oil consumer China from the coronavirus pandemic, Reuters reported.

“Cases of the highly contagious Delta variant have emerged in 14 of 32 provinces. This could see further mobility restrictions introduced,” ANZ analysts said.

They also flagged slowing manufacturing activity as a key concern, to both China and the United States.

“China’s economic activity continued to ease in July, with the official Manufacturing Purchasing Managers Index falling to 50.4 from 50.9 in June,” Reuters quoted ANZ as saying.

“Manufacturing activity also slowed in the U.S., with the ISM index falling to 59.5” – the lowest reading since January – from 60.6 in June, Reuters said.

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