• Crude oil faces challenges after downbeat economic data from the second largest oil consumer China.
• Saudi Arabia and Russia confirmed a 1.2 million barrel cut until the end of 2024.
• A warmer winter in the northern hemisphere could reduce the demand for Crude oil prices.

Western Texas Intermediate (WTI) trades lower near $79.80 per barrel during the Asian hours on Tuesday. Crude oil prices retrace the recent gains, with downbeat economic data from the second largest oil consumer China offsetting the positive impact of Saudi Arabia and Russia's commitment to a 1.2 million barrel cut until the end of 2024.

In October, China's Trade Balance data showed a reduced surplus balance at $56.53 billion, falling short of market expectations for an improvement to $81.95 billion from the previous readings of $77.71 billion. Exports (YoY) saw a notable decline of 6.4%, surpassing the expectations of a 3.1% decline.

UBS analysts suggest that the cuts initiated by Saudi Arabia and Russia might extend into the first quarter of 2024, citing "seasonally weaker oil demand at the start of every year." Meanwhile, global manufacturing PMIs indicate a slowing economic slowdown, which could act as a limiting factor on oil prices as demand decreases.

The contained conflict in the Middle East between Israel and Hamas has a limited impact on the oil supply. However, concerns about a warmer-than-expected winter in the northern hemisphere potentially reducing energy and fuel demand have weighed on Crude oil prices.

US Dollar (USD) recovers recent losses on the back of improved US bond yields. The higher Greenback dampens the value of the black Gold.

Traders expect that the US Federal Reserve (Fed) might pause its monetary policy tightening. This sentiment was fueled by last week's policy decision by the Fed and the indication of a softening labor market through disappointing employment data from the United States (US). Furthermore, market participants price in multiple rate cuts by the end of year 2024.

Market participants will likely focus on China's Consumer Price Index for October scheduled to be released on Thursday, which is expected to decline by 0.1% from being neutral previously.