In a significant development, U.S. crude oil prices plummeted below $78 a barrel on Tuesday, reaching their lowest level since July. The drop was fueled by a combination of weak global economic data and concerns over escalating tensions in the Middle East. West Texas Intermediate (WTI) fell by $3.45, or 4.3%, settling at $77.37 per barrel, while Brent crude fell by $3.57, or 4.2%, settling at $81.61 per barrel, marking their lowest prices since July.

The decline in oil prices came in the wake of China reporting mixed economic data. Although the country's crude oil imports increased in volume and value in October, its overall exports failed to meet expectations, signaling a slowdown in global demand. China reported a significant 6.4% drop in exports in U.S. dollar terms for October compared to the same period last year, surpassing the 3.3% predicted by a Reuters poll. The continuous decline in China's exports over the past six months has been attributed, in part, to higher interest rates placing downward pressure on the global economy.

The impact of China's economic data offset the positive effect of Saudi Arabia and Russia's oil output cuts, which had initially driven oil prices higher earlier in the week. Over the weekend, both countries confirmed that they would continue the production cuts until at least the end of the year. However, despite these efforts, oil prices have been steadily declining since mid-October as immediate concerns regarding the expansion of the Israel-Hamas conflict have eased.

It is worth noting that Minneapolis Federal Reserve President Neel Kashkari tempered expectations on Tuesday regarding the possibility of the U.S. central bank cutting rates. Kashkari emphasized the need to bring inflation back down to 2% over a reasonable period, but added that the ultimate path would depend on the economy's performance.

The falling oil prices and cautious remarks from Kashkari come against the backdrop of escalating tensions in the Middle East. The conflict between Israel and Hamas had initially sparked concerns of a potential disruption to oil supply, causing prices to spike. However, as worries of an immediate escalation ease, the impact on oil prices has reversed.

In conclusion, U.S. crude oil prices have hit their lowest point since July, driven by weak global economic data and diminishing concerns over the Israel-Hamas conflict. China's mixed economic data, particularly a significant drop in exports, has contributed to the decline, offsetting the positive impact of Saudi Arabia and Russia's ongoing oil output cuts. The market will continue to closely monitor economic indicators and geopolitical developments to gauge the future trajectory of oil prices.

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