Oil prices slid about 2% to a one-week low on Tuesday on demand worries following the release of negative economic news from Germany and China, while investors remained cautious ahead of a U.S. Federal Reserve decision on interest rates.

Brent futures were down $1.17, or 1.6%, to $72.74 a barrel by 11:26 a.m. EST (1626 GMT), while U.S. West Texas Intermediate (WTI) crude fell $1.22, or 1.7%, to $69.49.

That puts both crude benchmarks on track for their lowest closes since Dec. 10.

"Another disappointing dose of Chinese economic releases seen at the start of this week is significant and appears capable of weighing further on oil prices in the coming days," analysts at energy advisory firm Ritterbusch and Associates said in a note.

In China, the world's second-biggest economy, industrial output growth quickened slightly in November, while retail sales disappointed, keeping alive calls for Beijing to ramp up consumer-focused stimulus as policymakers brace for more U.S. trade tariffs once President-elect Donald Trump takes office for a second time.

In Germany, business morale worsened more than expected in December, according to a survey by the Ifo Institute, weighed down by companies' pessimistic assessment of the coming months amid geopolitical uncertainty and an industrial slump in Europe's largest economy.

"The only good thing about Germany's just-released Ifo index is that it is the final major macro indicator released this year. Time to ... end a year that will go down as the second consecutive year of economic stagnation," analysts at ING said in a note.

Germany's main political parties presented competing plans for lifting the economy out of the doldrums as campaigning kicked off for a snap election on Feb. 23 after Social Democratic Chancellor Olaf Scholz's three-party coalition collapsed last month.

In the world's biggest economy, meanwhile, U.S. retail sales increased more than expected in November amid an acceleration in motor vehicle and online purchases.

The report from the U.S. Commerce Department had no impact on expectations that the Fed would cut interest rates on Wednesday for the third time since the U.S. central bank initiated its policy easing cycle.

After hiking rates aggressively in 2022 and 2023 to tame a surge in inflation, the Fed started to lower rates in September.

Lower rates decrease borrowing costs, which can boost economic growth and demand for oil.

OIL SUPPLIES AND INVENTORIES

In the U.S., oil storage data is due from the American Petroleum Institute trade group later on Tuesday and the U.S. Energy Information Administration on Wednesday.

Analysts projected U.S. energy firms pulled about 1.9 million barrels of crude from storage during the week ended Dec. 13. [ENERGYUSA] [ENERGYAPI]

If correct, that would be the first time energy firms pulled oil out of storage for four weeks in a row since August, and would compare with an increase of 2.9 million barrels in the same week last year and an average decrease of 2.4 million barrels over the past five years (2019-2023).

In Kazakhstan, a member of the OPEC+ group of countries, oil and gas condensate output is now expected to be 87.8 million metric tons in 2024, down from the previously expected figure of more than 88 million tons (1.76 million barrels per day), Energy Minister Almasadam Satkaliyev said.

The European Union adopted a 15th package of sanctions against Russia, another member of OPEC+, over its invasion of Ukraine, including tougher measures against Chinese entities and more vessels from Moscow's so-called shadow fleet.

OPEC+ includes the Organization of the Petroleum Exporting Countries and allies like Kazakhstan and Russia that have agreed to curtail output to support oil prices.