Crude futures fall on demand fears, supply uncertainty

Crude futures fell on Wednesday because of pessimism about demand in the coming months as crude producers offered mixed signals about supply increases.

Brent crude futures were down 80 cents, or 1.13%, to $72.92 at 12:49.m. CDT (1749 GMT). U.S. West Texas Intermediate crude futures were down 92 cents, or 1.31%, at $69.41.

Both benchmarks had earlier lost $1 and then bounced back to gain $1 from Tuesday's closes, following news OPEC+ was discussing delaying a possible output increase because Libyan production is expected to rise.

A broader sell-off had seen prices for Brent crude futures tumble as much as 11%, or about $9, in a little over a week, hitting a low of $72.63 on Wednesday.

Lackluster data from the U.S. and China had strengthened persistent expectations of a weaker global economy and oil demand, helping set off a broader decline in world markets.

"It's definitely worries about a slowdown in manufacturing," said Phil Flynn, senior analyst at Price Futures Group. "That's the only negative we're seeing."

Meanwhile, traders believed there could be an end in sight to a dispute halting Libyan oil exports, which would bring more crude supply back online.

"This sell off moved the attention to what OPEC+’s response would be, which last week looked set to start the planned output hikes in October," wrote Alex Hodes, analyst at StoneX. "The group is now concerned about pricing and sources say that a delay to the hikes is now being discussed."

"We could flip on a dime," he said. "It could very easily turn positive. We could see a pretty decent crude draw later today."