Oil prices fell on Wednesday as lacklustre economic activity in China, the world’s biggest crude importer, weighed on sentiment, but prices were set for their first monthly gain since September as broadening Middle East conflicts raised supply concerns.
Brent crude futures for March, which expire today, fell 31 cents, or 0.4 percent, to $82.56 a barrel by 0700 GMT.
In addition, the U.S. West Texas Intermediate crude futures declined 25 cents, or 0.3 percent, to $77.57 a barrel, Reuters reported.
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Oil demand growth undercut by signs of a slowing Chinese economy
Manufacturing activity in China, the world’s second-largest economy and oil consumer, contracted for a fourth straight month in January, an official factory survey showed on Wednesday, suggesting economic momentum was flagging at the start of 2024.
Forecasts from several analysts, including from the Organization of the Petroleum Exporting Countries (OPEC), see oil demand growth in 2024 driven primarily by Chinese consumption and signs of a slowing economy there undercut those outlooks.
The widening Middle East conflicts have not halted actual output and the concerns about lower oil demand growth have mitigated the gains from the geopolitical concerns.
Crude stockpiles down by 2.5 million barrels
U.S. inventory data from the American Petroleum Institute (API) were mixed. Crude stockpiles dropped by 2.5 million barrels in the week ended Jan. 26, according to market sources citing API figures. Moreover, gasoline inventories gained 600,000 barrels, and distillate stocks fell by 2.1 million barrels.
U.S. government data on oil inventories is due later on Wednesday.
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