NEW YORK: Oil prices fell more than 3% on Tuesday, hitting their lowest level in six months amid growing concerns of oversupply and new US economic data signaling softer demand in the coming months.

Brent crude futures for February fell $2.90, or 3.8%, to $73.13 per barrel by 1700 GMT and traded as low as $73.08, the lowest since June. US West Texas Intermediate crude for January slipped $2.79, or 3.91%, to $68.53.

In the US, the consumer price index unexpectedly rose in November while inflation pushed higher, offering more evidence that the Federal Reserve was unlikely to pivot to interest rate cuts early next year.

The inflation data was in line with estimates, but speaks to a softening demand picture, said John Kilduff, partner with Again Capital LLC.

Global oil demand growth is set to slow in 2024 with OPEC and the International Energy Agency split on the extent. Meanwhile, a recent OPEC+ deal to limit supply underwhelmed the market.

“Negative sentiment towards the oil complex is still overpowering at the moment,” Kpler analyst Matt Smith said. Weak demand and concerns that the OPEC+ deal will not do enough to limit oil supply continue to weigh on prices, he added.

OPEC and the IEA both update their forecasts this week.

With US inflation figures out of the way, investors are now awaiting the outcome of Wednesday’s Federal Reserve meeting. The central bank is widely expected to keep rates on hold.

In the Middle East, Yemen’s Houthis said they attacked a Norwegian commercial tanker in their latest protest against Israel’s bombardment of Gaza, escalating the risk of supply disruptions in the region.

Also in focus are talks at the COP28 climate summit, where negotiators are awaiting a new draft deal after many countries criticised a previous version as too weak because it omitted a “phase-out” of fossil fuels.