Oil continues to slide on weak demand signals

Oil extended its biggest decline in four weeks on signs of weak demand and ample supply ahead of the upcoming OPEC+ meeting. U.S. crude traded below $70 a barrel on Tuesday after falling 4.4 percent from Friday’s close. China’s manufacturing activity showed signs of further weakening in May, raising concerns about the demand outlook for the world’s largest crude importer. The signs of ample supply are reflected in the spread between U.S. crude and Brent futures. “Markets are concerned that China’s demand for commodities is weakening faster than expected. There has been pressure on prices on the view that OPEC+ may not try to cut oil output,” said Vivek Dhar, director of mining and energy commodities research at the Commonwealth Bank of Australia. OPEC+ is scheduled to meet over the weekend to discuss the group’s production policy and market watchers expect the coalition to keep supply steady. Oil has fallen about 14% this year as China’s lackluster economic recovery and the Federal Reserve’s tight monetary policy weigh on the demand outlook. More recently, concerns over the U.S. debt ceiling have added to the bearish trend, despite signs of a possible resolution.