Oil prices fell in evening trading on Tuesday amid growing concern about the global economic outlook.
Brent, the benchmark for two thirds of the world’s oil, was trading 1.14 per cent lower at $81.79 a barrel at 5.19pm UAE time. West Texas Intermediate, the gauge that tracks US crude, was down 1.12 per cent at $77.88 a barrel.
On Monday, Brent settled 1.31 per cent higher at $82.73 a barrel, while WTI was up 1.14 per cent at $78.76 a barrel.
"Oil prices are slipping again ... after paring losses over the last couple of sessions," said Craig Erlam, senior market analyst at Oanda.
"The move lower today could even be another push to close the Opec+ gap from a few weeks ago after falling just short late last week," said Mr Erlam.
"Calls for $100 in the aftermath of the Opec+ decision may have been premature, although amid such an uncertain outlook, it is still possible if a soft landing is achieved."
Crude prices were steady in morning trading on expectations of tight crude supply.
“Despite reaching an agreement between Iraq’s central government and the [Kurdistan Regional Government], flows to a major Turkish export hub remain interrupted,” said Edward Bell, senior director of market economics at Emirates NBD.
Northern oil exports from Iraq remained suspended due to unresolved issues in the agreement between Baghdad and the Kurdistan Regional Government, Reuters reported on Monday, citing sources.
This followed an international arbitration ruling last month that declared Kurdish oil exports were illegal, leading to the shutdown of oil supply to the main export pipeline through the Turkish port of Ceyhan. About 0.5 per cent of global production has been halted.
Iraq, Opec’s second-largest producer, depends on oil revenue to meet 90 per cent of government expenditure.
The country exports about 3.3 million barrels of oil per day, while production in the semi-autonomous Kurdish region amounts to more than 450,000 bpd.
“This is a reminder that the oil market is going to remain sensitive to replacing the sour crude it was getting from Russia,” said Edward Moya, senior market analyst at Oanda.
“Not all crude grades are equal and can easily replace each other.”
Futures were also supported by signs of improving business sentiment in Germany, Europe’s largest economy.
Munich-based researchers the Ifo Institute said the country’s business climate index rose to 93.6 from 93.2 in March.
The survey has provided “another indication of an economy holding up relatively well amid the headwinds of tightening monetary policy and high inflation”, Mr Bell said.
Although the measure of current conditions dropped to 95 from 95.4 a month earlier, business sentiment in Germany has been increasing for the past six months as high energy costs fade, he said.
Last week, oil prices posted their first weekly loss since March, dragged down by fears of a recession in the US and concerns about global demand for crude.
Brent is still up nearly 4 per cent since Opec+ producers announced voluntary crude output cuts of 1.16 million bpd on April 2.
The output curbs, which will be in place starting from May until the end of December, are aimed at supporting the stability of the oil market, producers said.
Russia, part of the 23-member alliance of crude producers, also said it would extend its output cut of 500,000 bpd until the end of this year.
Moscow had previously pledged to curb production until June in response to the price caps imposed by the West on exports of its crude oil and refined products.
The American Petroleum Institute will release its weekly data on US crude stocks later on Tuesday.