Oil holds two-day drop as China angst offsets Russia export cuts

​Oil steadied after dropping almost four per cent over the previous two sessions as concerns over the state of China's economy were offset by Russia's plans to cut crude exports.

West Texas Intermediate traded above US$74 a barrel, after falling by 1.7 per cent on Monday as a major Libyan oil field came back online and China's second-quarter growth missed expectations. That led several Wall Street banks to slash their growth forecasts for the biggest crude importer, and Treasury Secretary Janet Yellen to warn of the risk of global ripple effects.

“Weaker than expected Chinese macro data and the reaction from the oil market shows that the key concern for the market remains demand,” said Warren Patterson, head of commodities strategy for ING Groep NV in Singapore. “However, we still remain constructive on the market with the oil balance set to tighten considerably over the second half.”