Crude prices dipped in early trading on Tuesday, with Brent falling back below $50 per barrel as economic concerns took centre stage with many analysts saying oil demand will stall later this year.
International benchmark Brent crude oil futures were trading at $49.95 per barrel at 0030 GMT, down 15 cents from their last settlement. U.S. West Texas Intermediate (WTI) crude futures were down 39 cents at $48.60 a barrel.
Analysts said that concerns over the global economy were weighing on the outlook for oil demand and on prices.
“The deterioration in the global economic outlook, financial market uncertainty and ripple effects on key areas of oil demand growth are likely to exacerbate already-lacklustre industrial demand growth trends,” British bank Barclays said in a note to clients.
JPMorgan also said in its latest oil market outlook that “macro-economic risks may weigh on oil prices”, although the U.S. bank added that oil prices would still likely rise between this year and the next as stocks are drawn down, and political risk and maturing oil fields tighten the market.
JPMorgan said it expected Brent and WTI to average $47.30 and $46.66 per barrel respectively this year and $56.75 a barrel for both in 2017. That’s an increase of $2 each for 2016 and $1.75 a barrel for both benchmarks for 2017, compared with the bank’s previous forecast.
In the latest sign of a glut in refined products, which traders say will reduce orders for crude oil, which is the most important refining feedstock, several tankers carrying gasoline-making components have dropped anchor off New York harbour, unable to discharge as onshore tanks are full.