NEW YORK – Crude oil future prices dropped on Tuesday amid concerns over oil demand outlook. 

The We st Texas Intermediate (WTI) for July delivery decreased by US$1.28, or 1.78%, to settle at US$70.50 a barrel on the New York Mercantile Exchange. Brent crude for August delivery lost US$0.71, or 0.93%, to settle at US$75.90 a barrel on the London ICE Futures Exchange. 

Oil prices pulled back on renewed concerns on Tuesday over demand, after substantial growth in the previous two sessions on expectation of stimulus policies from China. 

WTI oil pulled back as traders reacted to China’s decision to cut longer-term rates, said Vladimir Zernov, analyst with market information supplier FX Empire. 

Though China’s cut of its five-year loan prime rate from 4.3% to 4.2% was in line with analyst expectations, traders wanted to see a more aggressive cut, according to Zernov. 

China’s growth is going to continue to improve and the country may have some of the stimulus that should help get the demand side to come back in the second half of the year, said Mark Haefele, chief investment officer at UBS Global Wealth Management at a virtual media roundtable meeting on Tuesday. 

“If the global economy, besides China, continues to hold up better than expected, that should also support demand into the second half of the year,” Haefele told Xinhua. 

The recent weakness in oil prices provides an opportunity to add to select positions and UBS has a most preferred stance on oil and gold, said UBS in a mid-year outlook report for the second half of 2023 issued on Tuesday. 

- Nampa/ Xinhua