2023.07.0509:55:00UTC+00Oil Prices Dip Ahead Of Inventory Data

Oil prices traded lower on Wednesday, reversing some of the gains made the previous day after Russia and Saudi Arabia, the world's biggest oil exporters, announced they will extend their output cuts in order to support prices.

Benchmark Brent crude futures dropped half a percent to $75.89 a barrel, after having climbed over 2 percent on Tuesday.

WTI crude futures were up 1.8 percent at $71.03 given that there was no settlement on Tuesday because of the Independence Day holiday.

Fuel demand concerns returned to the fore after new data showed China's economy continued to struggle in June.

The dollar rose on weak risk sentiment after a private survey showed China's services activity expanded at the slowest pace in five months in June, adding to worries about a faltering post-pandemic recovery in the world's second-largest economy.

Eurozone Services PMI was finalized at a 5-month low and the U.K. services PMI showed renewed signs of fragility, suggesting that major economies will fall into recession later this year.

Looking ahead, investors await direction from U.S. crude and product inventories data from the American Petroleum Institute later in the data and government data on Thursday, both delayed by a day because of the U.S. Independence Day holiday.