Oil prices nudged lower on Tuesday as China's economic data renewed demand concerns, while investors remained cautious ahead of the U.S. Federal Reserve's interest rate decision.

U.S. West Texas Intermediate crude was down 11 cents at $70.60 a barrel at 0802 GMT, while Brent crude futures eased 2 cents to $73.89 a barrel.

Prices were "weighed on by profit-taking after last week's 6% rally and a batch of disappointing Chinese economic data yesterday," IG market analyst Tony Sycamore said.

On Monday, prices fell from multi-week highs on unexpected weakness in consumer spending data from China, despite strength in industrial output, and as investors moved into a holding pattern ahead of the Fed's meeting.

The Fed will hold its last policy meeting of the year on Tuesday and Wednesday, where it is widely expected to cut interest rates by a quarter of a percentage point.

The meeting will also shed light on how much further officials think they will cut interest rates in 2025 and 2026, and whether the central bank will scale back easing in anticipation of higher inflation under the incoming Trump administration.

"A 25 basis point cut has already been priced in by the market, so any surprises (from the Fed meeting) may move the market," said Anh Pham, a LSEG analyst.

Lower interest rates can boost economic growth and demand for oil.

The oil outlook for next year is clouded by growing supplies from non-OPEC+ countries such as the U.S. and Brazil and slowing demand, chiefly in China.

Source: Investing.com