© Reuters. FILE PHOTO: An aerial view shows a crude oil tanker at an oil terminal off Waidiao island in Zhoushan, Zhejiang province, China January 4, 2023. China Daily via REUTERS

By Robert Harvey

(Reuters) -Oil prices continued to fall on Wednesday, as investors weighed the effectiveness of an extension in OPEC+ cuts in tightening supply against a worsening demand outlook in China.

futures fell 63 cents, or 0.82%, to $76.57 a barrel by 1211 GMT. U.S. WTI crude futures fell by 58 cents, or 0.8%, to $71.74 a barrel.

The Organization of the Petroleum Exporting Countries and allies such as Russia (OPEC+) agreed on voluntary output cuts of about 2.2 million barrels per day (bpd) for the first quarter of 2024 late last week.

Saudi and Russian officials added this week that the cuts could be extended or deepened beyond March.

But both benchmarks closed at their lowest level since July 6 in the previous session, on a run of four straight days of losses.

“The decision to further reduce output from January failed to stimulate the market and the recent, seemingly coordinated, assurances from Saudi Arabia and Russia to extend the constraints beyond 1Q 2024 or even deepen the cuts if needed have also fallen to deaf ears,” PVM analyst Tamas Varga said.

Saudi Arabia cut its official selling price (OSP) for flagship Arab Light to Asia in January for the first time in seven months. Cutting OSPs could be “a sign that demand for barrels is struggling to gain traction,” Varga added.

Concerns over China’s economic health, which could limit overall fuel demand in the world’s second-largest oil consumer, also weighed on prices.

Rating agency Moody’s (NYSE:) lowered the outlook on China’s A1 rating to negative from stable on Tuesday.

China will release preliminary trade data, including import data, on Thursday. Earlier expectations showed China’s refinery runs to have declined in November.

Russian president Vladimir Putin has travelled to the United Arab Emirates and Saudi Arabia on Wednesday, to meet with the UAE’s President Sheikh Mohammed Bin Zayed Al Nahyan and Saudi Crown Prince Mohammed bin Salman.

At his meeting in the Abu Dhabi, Putin discussed Russia and the UAE’s cooperation in OPEC+ and other major oil and gas projects.