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Oil prices slip as US economic data weakens demand outlook
[NEW YORK] Oil futures sank on Tuesday as weak US economic data dimmed crude's demand outlook and pressured prices, while reports of a third-quarter decline in output from the world's largest oil producers kept oil from falling further.
Brent crude futures settled at US$58.89 a barrel, a 36-cent loss, while US West Texas Intermediate crude settled at US$53.62 a barrel, down 45 cents.
Oil pared some losses in post-settlement trade after American Petroleum Institute (API) data showed crude stocks unexpectedly fell last week by 5.9 million barrels, compared with analysts' expectations for an increase of 1.6 million barrels.
The Energy Information Administration's weekly oil inventories report is due at 10.30am EDT (1430 GMT) on Wednesday.
The daily slides followed a session in which both benchmarks posted their largest quarterly declines of the year.
US manufacturing activity dropped to a more than decade-low in September as the US-China trade war weighed on exports, according to a survey from the Institute for Supply Management (ISM).
The ISM manufacturing activity index showed a reading of 47.8, shrinking for the second straight month and below economists' expectations of 50.1. A reading below 50 indicates contraction.
Oil futures sank along with equities after the factory data for the world's largest economy.
"Negative ISM manufacturing data clobbered the stock market with spillover into the oil," said Jim Ritterbusch of Ritterbusch and Associates. "As overseas economic weakening slowly morphs into the US, additional downward revisions in forecasted global oil demand for this year and next will likely be forthcoming."
Earlier, oil prices had rallied as a Reuters survey found crude production in September from the Organization of the Petroleum Exporting Countries fell to 28.9 million bpd, down 750,000 bpd from August's revised figure and the lowest monthly total since 2011.
Output at the world's two largest producers, the United States and Russia, also fell in July and September respectively.
Russia's output declined to 11.24 million bpd in Sept 1-29 from 11.29 million bpd the previous month, sources said, although it remained above quotas set in an output deal between Russia and Opec.
Ecuador said it will withdraw from Opec from Jan 1 because of fiscal problems.
US crude oil output fell 276,000 bpd in July to 11.81 million bpd as federal offshore Gulf of Mexico production slid, the US Energy Information Administration reported on Monday.
US production peaked at 12.12 million bpd in April.
On Monday, oil prices were pressured by news that Saudi Aramco has restored full oil production and capacity to the levels that preceded Sept 14 attacks on its facilities.