LONDON- Oil prices fell on Tuesday, with both contracts heading for a fourth straight session of losses, weighed down by a weak demand picture in Asia and OPEC and its allies saying the market does not need more crude.

Brent crude was down 18 cents, or 0.2%, at $69.33 per barrel as of 1247 GMT, after rising as high as $69.77 earlier in the session.

U.S. West Intermediate crude (WTI) slid 33 cents, or 0.4%, to $66.96 a barrel, after reaching $67.66 earlier.

On the demand side, daily crude processing in China, the world's biggest oil importer, fell to its lowest in July since May 2020 as independent plants slashed production amid tighter quotas, high inventories and weakening profits. 

China's factory output and retail sales growth also slowed sharply and missed expectations in July, as new COVID-19 outbreaks and floods disrupted businesses.

Hedge funds sold petroleum last week for the sixth time in eight weeks as resurgent coronavirus infections in China, Europe and North America dampened hopes of a rapid resumption in long-distance air travel. 

Japan was set to extend its state of emergency in Tokyo and other regions to Sept. 12 and widen curbs to seven more prefectures. 

On the supply side, U.S. shale oil output is expected to rise to 8.1 million barrels per day (bpd) in September, the highest since May 2020, according government data. 

Last week, U.S. President Joe Biden's administration urged OPEC+, which groups members of the Organization of the Petroleum Exporting Countries and other producers such as Russia, to boost oil output to tackle rising gasoline prices.

But four sources told Reuters that the group believes oil markets do not need 

(Additional reporting by Yuka Obayashi; editing by David Evans) ((Shadia.Nasralla@thomsonreuters.com; +44 778 99 43141; Reuters Messaging: Reuters Messaging: shadia.nasralla.reuters.com@reuters.net))