Oil prices edged lower on Tuesday as optimism over demand faded, although tighter Russian and Iranian supplies driven by expanded Western sanctions curbed losses.

Brent crude futures were down 25 cents, or 0.33%, at $76.05 a barrel by 0950 GMT, while U.S. West Texas Intermediate (WTI) crude was down 44 cents, or 0.60%, at $73.12.

Both benchmarks fell on Monday, after rising for five straight days last week and ending at their highest levels since October on Friday amid expectations of more fiscal stimulus to revitalize China's faltering economy.

"This week's weakness is likely a technical correction, as traders react to weaker global economic data that dented the optimism seen earlier," said Priyanka Sachdeva, senior market analyst at Phillip Nova, referring to weak economic news from the United States and Germany.

"Higher inflation in Germany has raised concerns that the ECB may not be able to cut rates as quickly as expected across the eurozone, while U.S. manufacturing orders fell in November," said Ashley Kelty, an analyst at Panmure Liberum.

Market participants are looking to more data this week, such as the U.S. December non-farm payrolls report on Friday, for clues on U.S. interest rate policy and the outlook for oil demand.

Meanwhile, cold weather in the U.S. and Europe has boosted demand for heating oil, supporting prices.

Meteorologists expect the weather in the lower 48 U.S. states to remain colder than usual through Jan. 21, with the coldest days expected later this week.

Source: Investing.com