Oil prices fall as a result of the economic slowdown, despite continued reduction in OPEC

By Henning Gloystein

SINGAPORE (Reuters) – Oil prices fell on Tuesday as global economic slowdown begins to weigh on demand for oil, prompting calls at producer clubs OPEC for supply cuts to be prolonged.

Brent futures in the first month, the international benchmark for oil prices, were at $ 60.88 at 0038 GMT. It was 40 cents, or 0.7%, less than the closing of the last session.

US West Texas Intermediate (WTI) Futures contracts were $ 52.94 per barrel, down 31 cents or 0.6%.

Crude oil futures are now about 20% below their highs in 2018, reaching the end of April.

"The slowdown in economic activity now threatens to derail our baseline scenario of strong cyclical (oil) demand growth," said a note from Bank of America Merrill Lynch.

The South Korean economy contracted by 0.4% in the first quarter, while core inflation slowed to a 20-year low in May, according to data released on Tuesday, indicating a further slowdown in Asia.

"We are projecting Brent and WTI will average $ 70 per barrel and $ 59 per barrel in 2019, and $ 65 per barrel and $ 60 per barrel in 2020, "said Bank of America.

Oil prices have come under downward pressure as "tight supply is focused on increased risk of lower growth and demand," said Ole Hansen, Saxo's product strategy manager. Bank.

"The escalation of the trade war between the US and China has added new downside risks to already slowing economies," he said.

ANZ the bank said the price cuts came "despite OPEC strongly suggesting further cuts in production. "

The producers' club dominated by the Middle East of the Organization of Petroleum Exporting Countries (OPEC), as well as some allies, including Russia, has been holding supplies since the beginning of the year to support the market.

The group plans to decide later this month or early July to continue with its offer. OPECSaudi Arabia, de facto leader of Saudi Arabia, said on Monday that a consensus was emerging to maintain cuts in the second half to ensure market stability.

(Report by Henning Gloystein, edited by Richard Pullin)