Brent crude futures fell $2.95,
or 3.5per cent, to $82.23 a barrel. U.S. West Texas Intermediate crude fell to
$77.94 a barrel, down $2.88, or 3.6per cent.
Both contracts hit their lowest
levels since July 24, with Brent set to close below $84 a barrel for the first
time since Hamas Islamists' Oct. 7 attack on Israel.
"Traders will remain on high
alert for signs of a wider conflict emerging in the region that could disrupt
supplies, but it seems those fears are subsiding," OANDA analyst Craig
Erlam said.
A recovery in oil exports from
the Organization of Petroleum Exporting Countries also added to the pressure on
oil prices, UBS analyst Giovanni Staunovo said.
"OPEC crude exports are up
by about 1 million barrels per day (bpd) since their August low, as a result of
seasonally lower domestic demand in the Middle East. It seems it is too much
supply to be absorbed by oil consuming nations," Staunovo said.
The premium on front-month
loading Brent contracts over ones loading in six months was at a 2-1/2-month
low, indicating less concern about supply deficits.
On the demand side, China's crude oil imports in October showed robust growth but its total exports of goods and services contracted at a quicker pace than expected.
"The data signals the
continued decline in the Chinese economic outlook driven by deteriorating
demand in the country's largest export destination: the West," City Index
analyst Fiona Cincotta said.
The U.S. Energy Information
Administration now expects total petroleum consumption in the country to fall
by 300,000 bpd this year, reversing its earlier forecast of a 100,000 bpd
increase.
Fading investor hopes for a peak
in global interest rates also helped lift the U.S. dollar (.DXY) from recent
lows, making oil more expensive for holders of other currencies.
The U.S. central bank may have to
do more to reduce inflation to its two per cent target, Minneapolis Federal
Reserve President Neel Kashkari said. Investors are awaiting comments from Fed
Chair Jerome Powell, due on Wednesday and Thursday.
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