SINGAPORE, Aug 28 (Reuters) – Oil prices edged lower on Monday as investors fretted over the pace of China’s economic growth and the prospect of further hikes in U.S. interest rates that could dampen fuel demand.
Brent crude was down 8 cents, or 0.1%, at $84.40 a barrel by 0330 GMT, while US West Texas Intermediate crude was at $79.78 a barrel, down 5 cents, or 0.1%.
Brent and WTI posted losses for a second straight week on Friday after Fed Chairman Jerome Powell said the U.S. central bank would need to raise rates further to curb even higher inflation.
Oil rose in early Asian trade as China’s move to halve a stamp duty on stock trading to boost struggling markets temporarily boosted prices. read more
„Unfortunately, after last week’s modest (Chinese central bank interest) rate cut, the above announcements are yet another piecemeal move that will not change investor gloom toward China,” said Tony Sycamore, market analyst at IG.
China’s manufacturing purchasing managers’ index (PMI) is likely to reveal more bad economic news around the world’s second-largest economy later this week, Sycamore said, adding that the PMI could remain in contraction territory for a fifth consecutive month. .
CMC Markets analyst Tina Deng said the US economy’s soft-landing scenario buoyed energy markets on Monday, despite the Federal Reserve’s bleak stance on rate hikes.
In the United States, energy companies cut the number of active oil rigs in August for the ninth straight month, Baker Hughes said in a report.
Also, Tropical Storm Italia may form in the Caribbean, strengthen into a hurricane and hit Florida. read more
The hurricane is forecast to miss oil and gas hubs in the Gulf, and its impact could cause power outages for a day or two, IG’s Sycamore said. That should „see some short-term support for oil prices,” he said.
However, „supply tightening”, mainly on the back of falling oil inventories and supply cuts by OPEC+ oil producers, eroded prospects for easing sanctions on Iran and Venezuela, ANZ Research said in a note on Monday. .
Reporting by Florence Dan and Sutherson; Editing: Christopher Cushing and Clarence Fernandez
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