Crude prices slid on Tuesday amid continued concerns of lower demand and a whimpering recovery in China.
The recent downward pressure on oil comes amid concerns that China's economy isn't roaring back as expected after the country lifted its strict Covid lockdowns. The People's Bank of China recently cut key lending rates in order to shore up its economy.
"There is no longer any evidence of recovery in China, now that their exports and imports are falling. The lack of growth in China is now causing deflation and impacting the crude oil market," Louis Navellier of Navellier Calculated Investments said in a recent note to investors.
"Furthermore, the eurozone is now officially in a recession, with Germany and Ireland leading the contraction," he added.
West Texas Intermediate (CL=F) settled down more than 1% at $70.50 per barrel. Brent (BZ-F) futures closed at $75.90.
The world's largest oil producers have been trying to keep a floor on oil prices, but their efforts appear to be short-lived.
Earlier in June, Saudi Arabia said it will slash its oil output by another 1 million barrels per day starting in July. The cut came on top of an OPEC+ surprise output reduction announced in early April.
Recession fears and crude outflows from Russia continuing to make their way into the market are keeping a lid on prices.
"Overall oil demand is still expected to grow during this year but could increasingly slow down in the following years, which could fuel downward price pressures over the longer term," Denys Peleshok, head of Asia at CPT Markets recently said in a note to investors.
Oil related stocks slid on Tuesday amid pressure on the underlying commodity. The Energy Select Sector SPDR Fund (XLE), was down more than 2% during the session on Tuesday. XLE is roughly 10% lower year-to-date.
Ines is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre
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