Oil falls on economic data, awaits news of Iran nuclear deal

  • China unexpectedly lowers key rates as economic data disappoints
  • Iran reacts to EU nuclear text, seeks US flexibility
  • Oil production in Permian Basin set to hit record high in September -EIA
  • Coming soon: API data on US oil stocks at 4:30 p.m. ET

NEW YORK, Aug 16 (Reuters) – Oil prices fell more than 1% on Tuesday in volatile trading as economic data raised concerns of a possible global recession, as the market awaited clarification on the talks to revive a deal that could allow more Iranian oil exports.

Brent crude futures fell $1.41, or 1.5%, to $93.69 a barrel, after hitting a high of $95.95. West Texas Intermediate (WTI) crude fell $1.33, or 1.5%, to $88.08 a barrel, after hitting $90.65.

Contracts fell around 3% in their previous sessions.

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The European Union is assessing Iran’s response to what the bloc called its “final” proposal to salvage a 2015 nuclear deal, and is consulting with the United States, an EU spokesman said Tuesday. Read more

Iran responded to the proposal on Monday evening, but neither Tehran nor the EU provided details on the content of the response.

“It is still unclear what Iran said to the European Union last night, so some fine points could impact the outcome of the nuclear deal,” said UBS analyst Giovanni Staunovo.

Weak economic indicators weighed on prices.

US residential construction fell to its lowest level in nearly a year and a half in July, weighed down by rising mortgage rates and building material prices, suggesting the housing market could contract further in the third trimester. Read more

“Oil traders reacted on concerns about an economic slowdown and housing is consuming energy,” said Phil Flynn, an analyst at Price Futures Group. “It took us by surprise.”

China’s central bank cut lending rates in an attempt to revive demand as the national economy unexpectedly slowed in July after Beijing’s zero-COVID policy and a housing crisis slowed activity in factories and businesses. retail. Read more

State media quoted Premier Li Keqiang as saying China would reasonably step up macroeconomic policy support for the economy. Read more

Barclays lowered its Brent price forecast by $8 a barrel for this year and next, as it expects a large crude oil surplus in the near term due to “resilient” Russian supplies. Read more

Market participants were awaiting industry data on U.S. oil inventories due later on Tuesday. Crude and gasoline inventories likely fell last week, while distillate inventories rose, a preliminary Reuters poll showed on Monday.

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Reporting by Stephanie Kelly in New York; additional reporting by Ahmad Ghaddar in London and Muyu Xu in Singapore; edited by Barbara Lewis and Marguerita Choy

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