Oil slips as concern over sluggish demand counters stockpile dip

Oil fell as concerns over an uneven demand recovery and slowing economic growth due to monetary tightening offset signs of shrinking stockpiles.

West Texas Intermediate dropped below US$80 a barrel after closing little changed Tuesday. The recovery in fuel consumption has been uneven as Asia grapples with a flood of Russian oil into an already well-supplied market. Refiners in the region are mulling run cuts as profits from turning crude into products such as diesel plunge, while timespreads for benchmark Dubai grade weakened.

“Lingering concern that further U.S. interest rate cuts could tip economies into recession and lead to slower growth is overtaking the supply focus of the OPEC cuts,” said Ed Bell, senior director for market economics at Dubai-based lender Emirates NBD PJSC. “There's also concern about swelling balances in refined products and margins are compressed.”