U.S. crude oil prices fall below $78 a barrel to their lowest since July

An oil pumpjack pulls oil from the Permian Basin oil field in Odessa, Texas, on March 14, 2022.

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U.S. crude prices on Tuesday fell below $78 a barrel to hit the lowest point since July as weak global economic data overshadowed concerns that the Israel-Hamas war could erupt into a broader regional conflict.

West Texas Intermediate fell $3.45, or 4.3%, settling at $77.37 a barrel, while Brent fell $3.57, or 4.2%, settling at $81.61, both their lowest prices since July.

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Oil prices, YTD

The drop comes after China reported mixed economic data.

Beijing’s crude oil imports rose by volume and value in October, but the country’s overall exports fell more than expected, indicating slowing global demand. 

The world’s second-largest economy reported a 6.4% drop in exports in U.S. dollar terms for October compared to the same period a year ago, worse than the 3.3% drop predicted by a Reuters poll.

China’s exports have fallen for six consecutive months now as a higher interest rates put downward pressure on the global economy. Minneapolis Federal Reserve President Neel Kashkari lowered expectations Tuesday that the U.S. central bank might cut rates.

“We have to get inflation back down to 2% over a reasonable period of time. Ultimately, the economy will tell us how much is needed to get there, and I just don’t know,” Kashkari told Bloomberg Television.

The data out of China offset the effect of Saudi Arabia’s and Russia’s oil output cuts, which lifted oil prices earlier in the week. Riyadh and Moscow confirmed on Sunday that they would keep those cuts in place through at least the end of the year.

Oil prices had spiked in the week following Hamas’ devastating terrorist attacks on Israel on concerns that the war could escalate into a broader regional conflict that disrupts oil supply.

Prices have fallen since mid-October as worries of the conflict spreading in the immediate term have eased.

— CNBC’s Evelyn Cheng contributed to this report.

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