CORRECTED-Oil prices slip as weak Japan data exposes market jitters over fragile demand

Reuters

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 (Corrects Monday's price gain on Brent September contract in
paragraph 3)
    By Sonali Paul
    MELBOURNE, June 30 (Reuters) - Oil prices fell in early
trade on Tuesday after weak Japanese industrial production data,
not usually a market-moving factor, was enough to jangle trader
nerves over a bumpy recovery in fuel demand as coronavirus
pandemic restrictions ease.
    U.S. West Texas Intermediate (WTI) crude  CLc1  futures
briefly traded higher then fell 38 cents, or 1%, to $39.32 a
barrel by 0038 GMT, after climbing 3% on Monday.
    Brent crude  LCOc2  futures for September fell 32 cents, or
0.8%, to $41.53 a barrel, paring Monday's 92-cent gain. There
were no early trades on the August contract, which rose 69 cents
on Monday and expires on Tuesday. 
    "Japanese industrial production data released this morning
may take the gloss off the overnight moves," CMC Markets
strategist Michael McCarthy said in a note.
    Japan reported industrial output for May fell 8.4% in May
from the previous month, compared with market forecasts for a
5.6% decline.  urn:newsml:reuters.com:*:nT9N2B304Z
    Optimism on Monday had been based on strong growth in U.S.
pending home sales, bolstering belief that global fuel demand is
rising steadily as major economies reopen after coronavirus
lockdowns, while the Organization of Petroleum Exporting
Countries (OPEC) and its allies, known as OPEC+, comply with
production cut commitments.
    Bulls will be looking for more signs of a demand recovery in
data due on Tuesday from the American Petroleum Institute
industry group, and from the U.S. government on Wednesday. 
    A preliminary Reuters poll showed analysts expect U.S. crude
oil stockpiles fell from record highs last week and gasoline
inventories decreased for a third straight week.  urn:newsml:reuters.com:*:nL4N2E63UP
    "The oil 'perma bulls' continue to buy the dips as their
optimism stems from the fact that global demand is unambiguously
on the rise," AxiCorp global market strategist Stephen Innes
said in a note. 


 (Reporting by Sonali Paul; Editing by Kenneth Maxwell)
 ((Sonali.Paul@thomsonreuters.com; +61 3 9286 1419))

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