Brent crude futures were down 37 cents, or 0.48%, to $77.15 a barrel and U.S. WTI crude was 28 cents up from its Friday close of $73.55
Brent oil prices dropped in Asian trade on Tuesday as concern about a sluggish economy in China bringing down demand outweighed the impact of a blockade of oil production facilities in Libya.
Brent crude futures were down 37 cents, or 0.48%, to $77.15 a barrel by 0156 GMT.
U.S. WTI crude, which did not have a Monday settlement because of the U.S. Labour Day holiday, was 28 cents up from its Friday close of $73.55.
Oil remains under pressure given lingering Chinese demand concerns. Weaker than expected PMI data over the weekend would have done little to ease these concerns, according to Warren Patterson of ING.
China’s PMI hit a six-month low in August. On Monday, China posted the first decline in new export orders in eight months in July, and said new home prices rose in August at their weakest pace this year.
These demand jitters are clearly more than offsetting the supply disruptions from Libya, Patterson added.
The United Nations Support Mission in Libya said it held talks on Monday to resolve a dispute over control of the central bank that triggered a blockade of the country’s most valuable commodity, sending oil production to less than half of its usual level.
Rival factions concluded a draft agreement and aimed to sign it on Tuesday, the UN said without providing further details.
Libya’s National Oil Corp (NOC) said on Monday it had declared force majeure on its El Feel oil field from September 2.
Total production had plummeted to little more than 591,000 barrels per day as of August 28 from around 959,000 barrels per day on August 26, NOC said. Production was at around 1.28 million bpd on July 20.
Eight members of the Organization of the Petroleum Exporting Countries and affiliates, known as OPEC+, are scheduled to boost output by 180,000 bpd in October, a plan industry sources said is likely to go ahead regardless of demand concerns.
There are suggestions they will stick to their planned increase, however much will depend on how much more weakness we see in the market, said Patterson.
