NEW DELHI- Oil prices eased in early trade on Thursday amid disappointing economic data from key economies and as investors await a speech by US Federal Reserve Chair Jerome Powell on Friday for cues on interest rates.
Brent crude fell 26 cents, or 0.3 percent , to $82.95 a barrel, while US West Texas Intermediate crude dropped 30 cents, or 0.4 percent , to $78.59 a barrel.
Manufacturing data from a host of purchasing managers’ index (PMI) surveys on Wednesday painted a grim picture of the health of economies across the globe, raising demand concerns, analysts said.
Japan reported shrinking factory activity for a third straight month in August. Euro zone business activity also declined more than expected, particularly in Germany. Britain’s economy looked set to shrink in the current quarter, in danger of falling into recession.
US business activity approached the stagnation point in August, with growth at its weakest since February.
Meanwhile, Federal Reserve officials and policymakers from the European Central Bank, the Bank of England and the Bank of Japan head to Jackson Hole where higher-for-longer interest rate talk may dominate despite a dip in inflationary pressures.
The downward pressure on oil prices is largely due to concerns surrounding a potential decrease in demand and rising supply of oil on top of downbeat PMI readings, said Sugandha Sachdeva, executive director and chief strategist at Acme Investment Advisors.
On the supply side, Iran’s crude oil output will reach 3.4 million barrels per day (bpd) by the end of September, the country’s oil minister was quoted as saying by state media, even though US sanctions remain in place.
