Investing.com - U.S. oil prices regained some ground on Tuesday, but remained sharply lower as concerns over sluggish global growth and ample supply continued to weigh.
West Texas Intermediate crude oil futures for delivery in January were last down 1.98% to $55.15 a barrel after falling to lows of $54.81 earlier, the weakest level since May 2009.
Benchmark Brent was down 3.29% to $59.20 a barrel after falling below the $60 dollar threshold for the first time since May 2009 earlier Tuesday.
Oil came under renewed selling pressure after data overnight showing that factory activity in China contracted for the first time in seven months in December.
The preliminary reading of China’s HSBC manufacturing purchasing managers’ index came in at 49.5, down from a final reading of 50.0 in November and below forecasts of 49.9.
In the euro zone, surveys showed that private sector activity grew at a slightly faster rate in December, but the rate of expansion was still one of the weakest seen over the past year.
Germany’s private sector expanded at the slowest rate in 18 months while French private sector activity remained in contraction territory.
This offset a separate report showing that the ZEW German economic sentiment index improved to its highest level since May this month, indicating that conditions are becoming more favorable.
The data added to concerns over already sluggish demand for oil, while a combination of ample supply and weakening emerging market economies and their currencies also weighed.
The Russian ruble fell to fresh record lows against the dollar on Tuesday, after a surprise interest rate hike overnight failed to ease selling pressure on the currency. The ruble has been hard hit by a combination of falling oil prices, Russia’s main export, and western sanctions.
Last Friday the International Energy Agency cut its global oil demand forecast for next year by 230,000 barrels a day to 900,000 barrels, following similar cuts by OPEC and the U.S. Energy Information Administration.
Investors were turning their attention to the outcome of Wednesday’s Federal Reserve meeting, as ongoing speculation over the prospects for a U.S. rate hike next year fuelled expectations that the U.S. central bank could adjust its forward guidance.
In the U.S., data on Tuesday showed that housing starts and permits fell last month, but the underlying trend still pointed to a gradual improvement in the housing market.