By Henning Gloystein
SINGAPORE (Reuters) - Brent crude oil prices dipped on Tuesday as Asia's economic weakness persisted, extending losses after a sharp fall in the previous session, while U.S. futures were firmer following a report that indicated a drawdown in weekly inventory levels.
Market intelligence firm Genscape estimated a drop of about 1.8 million barrels last week at Cushing, Oklahoma. A weekly report from the American Petroleum Institute is expected later on Tuesday while the U.S. Energy Information Administration's report is expected Wednesday.
The internationally traded Brent contract was, however, pulled down by more gloomy news of stalling Asian growth.
Front-month U.S. crude futures were trading at $44.19 a barrel at 0605 GMT, up 19 cents from the previous session, while Brent was down 10 cents at $46.27 a barrel.
"With Asian demand slowing, not just due to the contagion from China's economic malaise, but also from rising political risks in countries such as China, Malaysia and Thailand, the outlook for oil market remains hazy," Energy Aspects said.
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Japanese manufacturers' confidence slumped the most in a year in September to an eight-month low and is forecast to worsen further as fears of a China-led global economic slowdown grow, a Reuters poll showed.
In China, fiscal spending reportedly jumped 25.9 percent in August from a year ago as Beijing tries to re-energise flagging economic growth, but stock markets were unimpressed, with China's major indexes down about 3 percent.
"In the first half of 2015, official GDP growth in China came in at 7 percent year-on-year. Official economic growth is in stark contrast to commodity demand growth which has been low through 2015," energy consultancy Wood Mackenzie said, adding that its China Activity Index implied economic growth of 5.3 percent in Q2 and just 4.5 percent in Q3.
On the supply side, Venezuela's president Nicolas Maduro repeated his call for the Organization of the Petroleum Exporting Countries (OPEC) to convene a heads of state meeting, saying he would present the country's proposals to shore up oil prices to the group.
Yet Middle East producers from OPEC - who effectively control the export club - have so far pledged to keep output high in a bid to defend market share against rising competition.
In fact, there is growing competition amongst low-cost Middle East producers like Kuwait and Saudi Arabia to undercut each other with discounts for their core clients in Asia.
(Editing by Himani Sarkar)