LONDON, Oct 18 (Reuters) – Oil prices fell slightly on Tuesday on fears of an economic slowdown and lower fuel demand from China as it persists in its strict zero COVID policy. .

Brent crude futures fell 41 cents, or 0.45%, to $91.21 a barrel at 0948 GMT while US West Texas Intermediate (WTI) crude futures fell 41 cents, or 0.48%, to $85.05.

WTI earlier rose more than $1 a barrel on a weaker dollar, making oil cheaper for buyers holding other currencies.

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But the US dollar index measuring the greenback against six peers rose later in the session, weighing on oil prices in early European trading.

Also in focus was the Bank of England’s plan to start selling off the vast holdings of government bonds it accumulated during the coronavirus crisis. This pushed up long-term yields, indicating heightened risks to financial stability.

Meanwhile, the outlook for fuel demand in China weighed on sentiment after the world’s top crude oil importer delayed the release of economic indicators originally scheduled for release on Tuesday, the CMC Markets analyst said. Tina Teng. No date was given for a rescheduled release. Read more

China’s adherence to its zero-COVID policy has continued to heighten uncertainties about the country’s economic growth, Teng said.

On the supply side, U.S. crude oil inventories are expected to have risen for a second consecutive week and are expected to have risen by 1.6 million barrels in the week to Oct. 14, according to a preliminary Reuters survey on Monday.

Production in the Permian Basin of Texas and New Mexico, the largest U.S. shale oil basin, is expected to increase by about 50,000 barrels per day (bpd) to a record 5.453 million bpd this month. , said the Energy Information Administration.

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Reporting by Rowena Edwards in London Additional reporting by Isabel Kua in Singapore Editing by David Goodman

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