© Reuters. FILE PHOTO: A diesel fuel nozzle with new European labels to standardise gasoline pumps in the EU zone is seen at a petrol station in Nice, France, October 12, 2018. REUTERS/Eric Gaillard/File Photo
By Arathy Somasekhar
HOUSTON (Reuters) – Oil prices eased on Tuesday as markets worried less about potential supply disruptions from the Middle East conflict and on data showing rising output from OPEC and the United States.
futures for December delivery, settled 4 cents lower at $87.41 a barrel, ahead of their expiry later on Tuesday. The more heavily traded January contract fell $1.33, or 1.4%，to $85.02.
U.S. West Texas Intermediate crude for December delivery fell $1.29, or 1.6%, to $81.02, while those for January delivery fell $1.18 to $80.50.
Trading was choppy with prices up as much as $1 higher during the session, but prices remain below $90 a barrel.
A Hamas spokesman said it will release a number of foreign captives in the coming days.
“We’ve taken some of the war premium out of the prices,” said Phil Flynn, analyst at Price Futures Group.
OPEC crude output rose by 180,000 barrels per day (bpd) in October, according to a Reuters survey, driven principally by Nigeria and Angola.
U.S. field production of also rose to a new monthly record in August at 13.05 million barrels per day, the Energy Information Administration said.
Weaker-than-expected manufacturing and non-manufacturing activity data in China stoked fears of slowing fuel demand from the world’s No. 2 oil consumer.
Euro zone inflation in October was at its lowest level in two years, falling to 2.9% from 4.3% in September, according to Eurostat’s flash estimate. That means the European Central Bank (ECB) is unlikely to hike interest rates anytime soon.
Slow global economic growth will keep crude prices anchored below $90 a barrel this year and next, unless the Israel-Hamas conflict draws in more countries in the Middle East and exacerbates supply tightness, a Reuters poll showed on Tuesday.
Investors remained wary of the potential for other countries entering the conflict.
“While Middle East developments have yet to affect oil, as the ground invasion intensifies, the risk of involvement from Iran rises, fueling tight supply concerns,” said Fiona Cincotta, senior financial market analyst at City Index.
Israel’s Prime Minister Benjamin Netanyahu dismissed calls for a halt to fighting to ease a humanitarian crisis, as Israeli forces attacked Hamas in the network of tunnels under the Palestinian exclave.
Looking ahead to a U.S. Federal Reserve meeting ending on Wednesday, analysts expect the central bank to hold rates steady, according to a poll by CME’s Fedwatch tool.