Oil sinks after Saudi-driven rally

Oil prices sank Tuesday as dealers mulled the weak demand outlook after having rallied the previous day on output cuts from key crude producer Saudi Arabia.

Europe's Brent oil contract and US counterpart WTI crude fell more than two percent, one day after bouncing on news that Riyadh slashed daily output by one million barrels for July in a bid to prop up prices.

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The announcement came at a weekend meeting of the 23-nation Opec+ oil producers' alliance, which also agreed to continue its current production cuts until the end of next year.

"Oil prices are under pressure...  as the glow from Saudi's supply cut fades and the reality of the sluggish demand backdrop sets in," noted Victoria Scholar, head of investment at trading firm Interactive Investor.