Oil prices hold amid storm disruptions, demand fears in focus By Investing.com

Investing.com– Oil prices steadied in Asian trade on Tuesday as traders tried to gauge the impact of Tropical Storm Francine on U.S. oil production, while concerns about sluggish demand remained in play.

Prices sustained steep losses from the previous week amid renewed concerns that global oil demand will slow, especially after average economic readings from top importer China. The prospect of oversupply and rising production also weighed.

But oil prices rebounded on Monday as sentiment improved.

which expires in November, were steady at $71.86 a barrel, while settling at $67.90 a barrel by 22:37 ET (02:37 GMT).

Tropical Storm Francine has begun to hit the Gulf of Mexico

Scores of oil companies were seen halting production and refining activities in the Gulf of Mexico as Tropical Storm Francine made its way to the mid-South US.

The storm is expected to potentially strengthen into a hurricane before making landfall and is expected to pummel the upper Texas and Louisiana coasts with heavy rain and strong winds this week.

The storm could cause widespread disruption in the energy-rich Gulf of Mexico, reducing North American crude supplies and presenting a more subdued near-term outlook for oil markets.

That notion gave oil markets some support, helping them recoup some of last week’s bruising losses.

Oil hit by demand concerns, China suffers

Oil prices have seen steep losses in recent sessions as markets worried about slowing demand, particularly in China, the main crude importer.

A string of weak economic readings in the country for August added to concerns about slowing growth, as did signs that growing adoption of electric vehicles was also weighing on fuel demand.

Beyond China, caution over US interest rates also weighed on oil markets, particularly ahead of key inflation data later this week.

The inflation reading comes just a week before a Federal Reserve meeting where the central bank is expected to cut interest rates by 25 basis points.