Investing.com-- Oil prices settled lower Tuesday, snapping a three-session rally as traders continued to assess demand ahead of fresh U.S. inventory data due this week.
At 14.30 p.m. ET (1830 GMT), Brent oil futures fell 2.3% to $79.55 a barrel, while West Texas Intermediate crude futures fell 2.4% to settle at $75.53 a barrel.
Both crude benchmarks have rebounded some 7% over the past three sessions, rebounding from their lowest levels since early January, driven by expectations of U.S. interest rate cuts that could boost fuel demand, potential closures of Libyan oilfields and concerns over a wider Middle East conflict potentially disrupting supply from the key producing region.
Goldman cuts Brent target range
Goldman Sachs (NYSE:GS) has lowered its expected trading range for Brent crude oil prices, to $70-$85 per barrel, a cut of $5 per barrel from previous estimates.
The updated forecast underscores Goldman Sachs' cautious outlook on global oil markets.
One of the primary drivers behind the decision is the unexpected stability in OPEC commercial inventories. Contrary to earlier expectations of drawdowns during the summer months, inventories have remained higher than anticipated.
This stability is largely attributed to a surge in U.S. liquids supply, which has offset some of the seasonal demand.
Additionally, weaker demand growth from China has played a crucial role in this inventory buildup. Together, these factors have contributed approximately $3-$4 per barrel to the downward revision of the Brent price range.
The increase in U.S. oil production has also had a significant impact on Goldman Sachs' revised forecast.
Fresh U.S. crude inventory data due
The weakness in oil prices comes just ahead of fresh weekly domestic inventory data due later in the session.
The American Petroleum Institute is expected to report that domestic crude inventories fell by 3M (NYSE:MMM) barrels for the week through Aug. 26.
The data is due a day ahead of the official petroleum report from the Energy information Administration.
Middle East tensions persist amid no Gaza ceasefire
Ongoing concerns over a broader war in the Middle East, amid a lack of progress on Gaza ceasefire agreement helped keep oil losses in check.
Israel launched a preemptive strike against targets in Lebanon, while the Hezbollah group launched some rocket strikes on parts of Israel.
While both sides signaled they did not seek a further escalation, the strikes further undermined progress towards a potential ceasefire.
(Peter Nurse, Ambar Warrick contributed to this article.)