Oil steady as supply concerns offset worries over demand

Oil prices were flat on Tuesday as worries that further possible U.S. interest rate hikes could pull down demand were countered by concerns a tropical storm off the U.S. Gulf Coast could impact supply.

Brent crude was 2 cents lower at $84.40 a barrel by 0032 GMT, while U.S. West Texas Intermediate crude shed 3 cents to $80.07.

Investors await key U.S. economic data later this week that will help determine the path of interest rates this year and next. Federal Reserve Chair Jerome Powell on Friday said the U.S. central bank may need to raise rates further to cool stubborn inflation.

Markets anticipate an 80 per cent chance the Fed standing pat next month, Refinitiv's FedWatch tool showed, but the probability of a rate hike in November is now seen at roughly 56 per cent. FEDWATCH

Meanwhile, Tropical Storm Idalia lashed western Cuba on Monday and was almost a hurricane as it headed toward Florida. The storm is likely to cause power outages and could impact crude production on the eastern side of U.S. Gulf Coast.

This week the focus will be on the U.S. personal consumption expenditures price index report that is due on Thursday and the August nonfarm payrolls data on Friday.

Investors also continue to remain wary about China's economic recovery, worrying about demand in the world's second-largest oil consumer.