U.S. crude settled at a six-year low on Tuesday after No. 2 consumer China devalued its currency, raising questions about its demand for crude, while a new projection showed non-OPEC producers were more resilient than expected to keeping output high amid low prices. (Tweet This)
U.S. crude hit contract lows, while Brent, the global benchmark, lost most gains from a Monday rally, heading for its largest decline in a week.
"It's time to sell any and all rallies," said Tariq Zahir, managing member at Tyche Capital Advisors in Laurel Hollow in New York, who believes oil prices are heading lower.
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China's central bank made what it called a "one-off depreciation" of nearly 2 percent in the yuan after a run of poor economic data, guiding the currency to a near 3-year low.
OPEC projected that oil supplies from countries outside the group will rise by 90,000 barrels per day this year, a sign the crude price collapse was taking longer than thought to hit the North American shale oil industry and other competing sources.