Does exercising at low intensity burn more fat?

No!

True, at rest, the average person uses about 60% fat for each calorie burned, vs 40% carbohydrate. So, the primary fuel is fat but not many calories are burned.

At relatively low intensities (50% Vo2max), both fat and carbohydrates are used at a slow rate of about 3-5 calories per minute.

As the intensity increases, our body starts to use more carbs than fat for each calorie burned. The shift to carbs is due to the availability of oxygen.

Based on the fact that the body starts to use more carbs than fat at higher intensities, many people believe that to burn more fat, they should workout at relatively low intensities.
Not so.
Fat's always being used as fuel during exercise- even at higher intensities; just in smaller amounts.

Let's compare 2 workout intensities for the same person exercising on a treadmill for 30 minutes. The number of calories is made up but the %fat burned isn't.

1. 50% Vo2max- 200 calories burned- 50% fat burned = 100 fat calories burned.
2. 70% Vo2max- 310 calories burned- 40% fat burned = 124 fat calories burned.

Even though the percentage of fat decreases as intensity increases, the total amount of fat burned is higher with higher intensities because the total calories burned is higher.

So, want to maximize fat reduction? Exercise as hard as possible for as long as possible and as often as possible, without overtraining!