Investing.com– Oil prices fell in Asian trade on Tuesday, extending losses from the previous session as sluggish US and European economic data raised some questions about the outlook for need.

But prices remain near a near three-month high, fueled by bets that a cold snap across the US and Europe will help boost near-term demand.

The prospect of further stimulus measures by major oil importer China also continued to weigh on prices, with a focus on upcoming inflation data from the country this week.

Expiring in March fell 0.3% to $76.08 a barrel, while fell 0.4% to $72.65 a barrel at 20:05 ET (01:05 GMT).

Weak economic data fueled fears

Slower-than-expected US data for December raised concerns that business activity in the world’s biggest fuel consumer is slowing, presenting a subdued demand outlook. Durable goods and factory orders data also read slower than expected.

In Europe, the German reading was stronger than expected for December, signaling further economic pressure in the euro zone, while PMI data presented a mixed picture of business activity in the bloc.

The readings come ahead of a slew of key inflation and labor market prints from the US and euro zone this week, which are likely to weigh on the economic outlook.

The dollar also advanced ahead of key data due on Friday, which in turn pressured oil prices. While the greenback initially fell on a report that incoming President Donald Trump would adopt a less stringent tariff policy than initially signaled, it recovered most of its losses after Trump denied the report .

The polar vortex is fueling hopes of a near-term increase in oil demand

But losses in oil prices were limited by bets that severe cold weather in the US and Europe will drive demand for oil, especially distillates used for heating purposes.

A polar vortex is set to cause snowstorms in parts of the US, while temperatures are also dropping in Europe.

Elsewhere, expectations of demand growth were also boosted by Saudi Aramco – the world’s largest oil exporter – raising prices to Asian buyers in February – the first price increase in three months.

Meanwhile, Sudan lifted a nearly year-long freeze on oil transport from South Sudan to a port on the Red Sea, amid improving security conditions.