An aerial view shows tugboats helping a crude oil tanker dock at an oil terminal on Waitiao Island in Sushan, China’s Zhejiang province, on July 18, 2022. cnsphoto /File photo via REUTERS Get license rights
LONDON, Aug 24 (Reuters) – Oil prices were steady after an earlier decline on Thursday on disappointing economic data from major economies, as investors awaited a speech by U.S. Federal Reserve Chairman Jerome Powell on Friday for clues on interest rate moves.
Brent crude was up 6 cents, or 0.1%, at $83.27 a barrel by 0855 GMT, down from $82.57 in the previous session. U.S. West Texas Intermediate crude was up 4 cents, or 0.1%, at $78.93 a barrel, before easing to $78.22.
Manufacturing data from several purchasing managers’ index (PMI) surveys on Wednesday painted a bleak picture of the health of economies around the world, raising demand concerns, analysts said.
Japan reported factory activity contracted for a third straight month in August. Eurozone business activity also slowed more than expected, particularly in Germany. Britain’s economy looks set to contract in the current quarter and is at risk of falling into recession.
U.S. business activity stagnated in August, and growth has been weak since February.
“China’s poor growth pace is the primary reason for the decline in global output,” BCA Research analysts said. “This weighs on European countries that are heavily exposed to Chinese demand, such as Germany,” they added.
Meanwhile, Federal Reserve officials and policymakers from the European Central Bank, Bank of England and Bank of Japan head to Jackson Hole, where higher interest rates are likely to dominate despite a decline in inflationary pressures.
On the supply side, Iran’s crude oil production will reach 3.4 million barrels per day (bpd) by the end of September, even with US sanctions in place, the country’s oil minister was quoted as saying by state media.
US officials are preparing a plan to ease sanctions on Venezuela’s oil sector if the South American country moves towards free and fair presidential elections. .
A larger-than-expected drop in US crude oil inventories helped support the market.
U.S. crude oil inventories (USOILC=ECI) fell 6.1 million barrels in the week to 433.5 million barrels from Aug. 18, more than analysts in a Reuters poll had expected a decline of 2.8 million barrels.
However, a rally in U.S. gasoline stocks last week indicated weaker-than-expected fuel demand.
Meanwhile, analysts expect Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries (OPEC), to extend its 1 million bpd voluntary production cut until October to support the market.
Additional reporting by Mohi Narayan in New Delhi; Editing by Kim Coghill
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