Brent futures fell 72 cents, or 1.0%, to settle at US$73.19 a barrel, while US West Texas Intermediate crude slipped 63 cents, or 0.9%, to settle at US$70.08.
NEW YORK: Oil prices eased about 1% to a one-week low on Tuesday on demand worries following the release of negative economic news from Germany and China, while investors remained cautious ahead of a US Federal Reserve decision on interest rates.
Brent futures fell 72 cents, or 1.0%, to settle at US$73.19 a barrel, while US West Texas Intermediate crude slipped 63 cents, or 0.9%, to settle at US$70.08.
That was the lowest close for Brent since Dec 10 and cut the premium of Brent over WTI to a 12-week low of US$3.54 a barrel, based on the February contracts.
Analysts have said when Brent's premium over WTI falls below US$4 a barrel, it does not make as much economic sense for energy firms to send ships to pick up US crude, which should result in lower US exports.
In China, the world's second-biggest economy, industrial output growth quickened slightly in November, while retail sales disappointed, keeping alive calls for Beijing to ramp up consumer-focused stimulus as policymakers brace for more US trade tariffs once President-elect Donald Trump takes office for a second time.
In Germany, business morale worsened more than expected in December, according to a survey by the Ifo Institute, weighed down by companies' pessimistic assessment of the coming months amid geopolitical uncertainty and an industrial slump in Europe's largest economy.
"The only good thing about Germany's just-released Ifo index is that it is the final major macro indicator released this year. Time to ... end a year that will go down as the second consecutive year of economic stagnation," analysts at ING, a bank, said in a note.
In the world's biggest economy, meanwhile, US retail sales increased more than expected in November amid an acceleration in motor vehicle and online purchases.
The report from the US Commerce Department had no impact on expectations that the Fed would cut interest rates on Wednesday for the third time since the US central bank initiated its policy easing cycle.
Investors, however, will watch US policymakers' forecasts for signals on whether the Fed will be more cautious in 2025, as economic indicators, such as the retail sales data, point to continued resilience and inflation remains persistent.
After hiking rates aggressively in 2022 and 2023 to tame a surge in inflation, the Fed started to lower rates in September.
Lower rates decrease borrowing costs, which can boost economic growth and demand for oil.
In the US, oil storage data is due from the American Petroleum Institute trade group later on Tuesday and the US Energy Information Administration on Wednesday.
Analysts projected US energy firms pulled about 1.6 million barrels of crude from storage during the week ended Dec. 13.
If correct, that would be the first time energy firms pulled oil out of storage for four weeks in a row since August, and would compare with an increase of 2.9 million barrels in the same week last year and an average decrease of 2.4 million barrels over the past five years (2019-2023).
In Kazakhstan, a member of the Opec+ group of countries, oil and gas condensate output is now expected to be 87.8 million metric tonnes in 2024, down from the previously expected figure of more than 88 million tonnes (1.76 million barrels per day), Energy Minister Almasadam Satkaliyev said.
The European Union adopted a 15th package of sanctions against Russia, another member of Opec+, over its invasion of Ukraine, including tougher measures against Chinese entities and more vessels from Moscow's so-called shadow fleet.
Britain also sanctioned ships it alleged were carrying illicit Russian oil.
Opec+ includes the Organization of the Petroleum Exporting Countries and allies like Kazakhstan and Russia that have agreed to curtail output to support oil prices. — Reuters
