Oil stabilizes, US Federal Reserve Chairman’s speech in the spotlight

Zhoushan crude oil terminal

An aerial view shows tugboats helping a crude oil tanker dock at an oil terminal, off Waidiao Island in Zhoushan, Zhejiang Province, China on July 18, 2022. cnsphoto via REUTERS / file photo Obtain licensing rights

LONDON, Aug 24 (Reuters) – Oil prices stabilized after earlier declines on Thursday caused by disappointing economic data from major economies, as investors awaited a speech by US Federal Reserve Chairman Jerome Powell on Friday, looking for clues about interest rate movements.

And by 0855 GMT, Brent crude rose six cents, or 0.1 percent, to $ 83.27 a barrel, after it fell to $ 82.57 earlier in the session. US West Texas Intermediate crude rose four cents, or 0.1 percent, to $78.93 a barrel, after falling to $78.22.

Manufacturing data released by a batch of Purchasing Managers’ Index (PMI) surveys on Wednesday painted a bleak picture of the health of economies around the world, raising concerns about demand, analysts said.

Japan reported factory activity contracted for the third consecutive month in August. Business activity in the Eurozone also fell more than expected, especially in Germany. It appears that the British economy is set to contract in the current quarter, leaving it at risk of falling into recession.

Business activity in the US came close to a recession point in August, with growth at its weakest level since February.

“China’s deteriorating growth momentum is the main cause of the global manufacturing deterioration,” BCA Research analysts said. They added that this affects European countries where growth remains highly vulnerable to Chinese demand, such as Germany.

Meanwhile, Fed officials and policy makers from the European Central Bank, Bank of England and Bank of Japan head to Jackson Hole where talk of higher interest rates may dominate for a while longer despite easing inflationary pressures.

On the supply side, Iran’s oil minister was quoted by state media as saying that Iran’s crude oil production will reach 3.4 million barrels per day by the end of September, despite continued US sanctions.

U.S. officials are also drafting a proposal that would ease sanctions on Venezuela’s oil sector, allowing more companies and countries to import crude oil, if the South American country moves toward free and fair presidential elections, according to five people familiar with the plans. .

A larger-than-expected decline in US crude inventories helped support the market.

US crude stocks fell by 6.1 million barrels in the week ending August 18 to 433.5 million barrels, compared with analysts’ expectations in a Reuters poll for a decline of 2.8 million barrels.

However, a rise in US gasoline inventories last week indicated that demand for the fuel was weaker than expected.

Meanwhile, analysts expect Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries (OPEC), to extend its voluntary production cut by 1 million barrels per day until October to help prop up the market.

(Reporting by Mohi Narayan in New Delhi; Reporting by Muhammad for The Arabic Bulletin) Editing by Kim Coghill

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