Oil prices fell in early Asian trade on Thursday, as dismal industrial data in major economies offset optimism about a larger-than-expected drawdown in US petroleum inventories.
Markets are also looking for clues on how long interest rates will remain at present levels, ahead of Federal Reserve Chair Jerome Powell’s speech at a central bank symposium in Jackson Hole, Wyoming, which begins on Thursday.
Brent crude slid 27 cents, or 0.3%, to $82.94 per barrel by 0002 GMT, while West Texas Intermediate crude in the United States fell 31 cents, or 0.4%, to $78.58 per barrel.
On Wednesday, manufacturing statistics from a slew of purchasing managers’ index (PMI) surveys portrayed a bleak picture of the health of economies throughout the world, stoking demand fears.
In August, Japan recorded a third consecutive month of declining industry activity. Business activity in the Eurozone fell more than predicted, particularly in Germany. Britain’s GDP seems destined to contract in the current quarter, putting the country in danger of entering a recession.
In August, business activity in the United States approached a halt, with growth at its slowest since February.
Meanwhile, Federal Reserve officials, as well as policymakers from the European Central Bank, the Bank of England, and the Bank of Japan, will convene at Jackson Hole, where higher-for-longer interest rate talk is expected to prevail, despite a drop in inflationary pressures.
On the supply side, Iran’s crude oil output will exceed 3.4 million barrels per day (bpd) by the end of September, according to state media, despite the fact that US sanctions remain in place.
According to five sources with knowledge of the preparations, US officials are also considering a proposal to remove sanctions on Venezuela’s oil industry, allowing more companies and countries to import its crude oil if the South American country steps toward a free and fair presidential election.
US crude inventories (USOILC=ECI) declined by 6.1 million barrels in the week ending Aug. 18, falling to 433.5 million barrels, compared to a 2.8 million-barrel reduction predicted by analysts in a Reuters poll.
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