Crude oil futures settled lower on Tuesday amid concerns about likely excess supply in the market with OPEC and allies set to increase production, and the restoration of crude output in the U.S. after Hurricane Ida.
Weak Chinese economic data weighed as well on crude oil prices.
West Texas Intermediate Crude oil futures for October ended down by $0.71 or about 1% at $68.50 a barrel.
The Organization of the Petroleum Exporting Countries and its allies are set to meed on Wednesday. It is widely expected that the group will agree to proceed with plans to add another 400,000 barrels per day of supply each month through December.
China’s service sector contracted in August amid the renewed virus flare-up, official survey results from the National Bureau of Statistics showed on Tuesday.
The official non-manufacturing Purchasing Managers’ Index, which measures the performance of the services and construction sectors, declined to 47.5 in August from 53.3 a month ago. A reading below 50 indicates contraction in the sector.
At the same time, the factory PMI came in at 50.1, down from 50.4 in the previous month. The expected reading was 50.2.
The composite output index fell to around 48.8 in August from 52.4 in July.
Meanwhile, traders await weekly inventory data from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA). The API is due out later today, while EIA’s inventory data is due Wednesday morning.