TOKYO: Oil prices fell on Tuesday, paring the previous day's nearly 2.0 per cent rise as the top U.S. diplomat renewed efforts to push for a ceasefire in the Middle East, and as slow demand in China, the world's top oil importer, continued to weigh on the market.
Brent crude futures for December delivery were down 26 cents, or 0.3 per cent, at US$74.03 a barrel at 0046 GMT. U.S. West Texas Intermediate crude futures for November delivery were 2 cents lower at US$70.54 a barrel on the contract's last day as the front month.
The more actively traded WTI futures for December, which will soon become the front month, lost 23 cents, or 0.3 per cent, to US$69.81 per barrel.
Both Brent and WTI settled nearly 2.0 per cent higher on Monday, recouping some of last week's more than 7.0 per cent 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.
"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 with Rakuten Securities.
"The market is expected to rise if there are clearer signs of China's economic recovery, bolstered by Beijing's stimulus measures and improvement in U.S. economy following interest rate cuts," he said. But gains are likely to be limited by persistent uncertainty about the overall global economic outlook, he added.
U.S. Secretary of State Antony Blinken headed to the Middle East on Monday seeking to revive talks to end the Gaza war and defuse the spillover conflict in Lebanon.
Israeli military forces besieged hospitals and shelters for displaced people in the northern Gaza Strip on Monday as they stepped up their operations, preventing critical aid from reaching civilians, residents and medics said.
Meanwhile, China cut benchmark lending rates as anticipated at the monthly fixing on Monday, following reductions to other policy rates last month as part of a package of stimulus measures to revive the economy.
The move comes after 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 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 oil giant said on Monday.