A pump jack is seen at sunrise on October 14, 2014 near Bakersfield, California. Reuters/Lucy Nicholson/File Photo Obtain licensing rights
SINGAPORE, Aug 31 (Reuters) – Oil prices fell on Thursday after data showed China’s manufacturing activity shrank for a fifth straight month, and investors looked to the late-day U.S. personal consumption expenditure report for any clues on interest rates. Waited carefully. Approach.
Brent crude futures for October, which expires on Thursday, fell 9 cents, or 0.1%, to $85.77 a barrel by 0630 GMT. The more active November contract was down 10 cents, or 0.1%, at $85.14.
US West Texas Intermediate crude futures for October fell 6 cents, or 0.1%, to $81.57.
China’s manufacturing activity rebounded in August, an official factory survey showed on Thursday, raising concerns about weakness in the world’s second-largest economy.
According to the National Bureau of Statistics, the official Purchasing Managers’ Index (PMI) rose to 49.7 from 49.3 in July, but remained below the 50-point level of expansionary contraction.
Yep Jun Rong, market strategist at IG, said a tighter US oil supply scenario supported prices in the previous session, but this was in contrast to concerns about demand.
“Overall, contrarian factors lead prices to some indecision today, as well as some wait-and-see position as the focus shifts to the US core PCE release tonight,” Yep said.
Investors are eyeing the inflation number as measured by US personal consumption expenditure, which will be released on Thursday. PCE is the Federal Reserve’s favorite gauge of inflation.
For now, oil prices are poised for a weekly climb, with US government data showing that crude supplies are lower than expected, while a military coup in OPEC member Gabon also disrupted crude supplies. Suspicion has been expressed.
Analysts expect Saudi Arabia to impose a voluntary oil cut of 1 million barrels per day for the third month in a row in October, joining cuts by OPEC+, the Organization of the Petroleum Exporting Countries, and allies led by Russia.
Meanwhile, the US government revised its GDP growth for the last quarter to 2.1% from 2.4% reported last month, and data released on Wednesday showed that private payrolls growth slowed significantly in August. .
The former Boston Fed chairman said on Wednesday that the Federal Reserve may end its interest rate hike cycle if the labor market and economic growth remain slow at the current sequential pace.
“The bad news was good, as weak US economic data dampened hopes of another rate hike,” ANZ Research said in a note. Higher interest rates reduce demand and put pressure on oil prices.
Reporting by Jeslyn Lehrh in Singapore; Additional reporting by Katya Golubkova in Tokyo; Editing by Stephen Coates, Gerry Doyle and Kim Coghill
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