Oil Crashes Below $95 A Barrel On Recessionary Worries After China Data

Oil prices fell on Tuesday, extending losses from the previous session, after economic data from China, the world's largest crude importer, spurred fresh concerns about a potential global recession that could hit energy demand.

Brent crude futures fell 90 cents, or 1 per cent, to $94.20 a barrel. WTI crude futures fell 81 cents, or 0.9 per cent, to $88.60 a barrel.

Oil futures fell about 3 per cent during the previous session.

Prices fell after disappointing economic data from China.

The country's central bank cut lending rates to revive demand as data showed the economy slowing unexpectedly in July, with factory and retail activity squeezed by Beijing's zero-COVID policy and a property crisis.

China's fuel product exports will rebound in August to near the highest for the year so far after Beijing issued more quotas in June and July, although broader curbs are set to cap shipments at seven-year lows for 2022, analysts and traders said.

In the United States, total output in the major US shale oil basins will rise to 9.049 million bpd in September, the highest since March 2020, the US Energy Information Administration (EIA) said in its productivity report on Monday.

Market participants awaited industry data on US crude stockpiles due later on Tuesday. Oil and gasoline stockpiles likely fell last week, while distillate inventories rose, a preliminary Reuters poll showed on Monday. 

Investors also watched talks to revive the 2015 Iran nuclear deal. Oil supply could rise if Iran and the United States accept an offer from the European Union, which would remove sanctions on Iranian oil exports, analysts said.

Iran responded to the European Union's "final" draft text to save a 2015 nuclear deal on Monday, an EU official said, but provided no details on Iran's response to the text. The Iranian foreign minister called on the United States to show flexibility to resolve three remaining issues.