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Oil Prices Steady on US Business Activity and China Demand Data

Oil Prices Steady on US Business Activity and China Demand Data
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  • US business activity weakens again in October: S&P Global
  • China September Crude Imports Fall, Fuel Exports Hit 15-Month High

NEW YORK, Oct 24 (Reuters) – Oil prices stabilized in choppy trading on Monday as weakening U.S. business data eased expectations of more aggressive interest rate hikes. , while data showing Chinese demand remained lackluster in September’s limited prices.

Brent crude futures for December settlement fell 21 cents, or 0.2%, to $93.29 a barrel at 12:08 p.m. EDT (1608 GMT), after rising 2% last week. US West Texas Intermediate crude for December delivery fell 34 cents, or 0.4%, to $84.71 a barrel. Both benchmarks had fallen $2 a barrel earlier in the session.

Although higher than in August, China’s September crude oil imports of 9.79 million barrels per day were 2% lower than a year earlier, customs data showed on Monday, while independent refiners braking performance amid thin margins and lackluster demand.

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“The recent recovery in oil imports faltered in September,” the ANZ analysts said in a note, adding that increased quotas were not used by independent refiners as ongoing COVID-related lockdowns weighed on demand.

Uncertainty over China’s zero-COVID policy and the housing crisis are undermining the effectiveness of growth-friendly measures, ING analysts said in a note, even though third-quarter gross domestic product growth beat expectations.

Oil prices recovered some ground after data showed US business activity contracted for the fourth consecutive month in October, with manufacturing and services companies down monthly survey of purchasing managers reported weaker customer demand.

POSITIVE SIGNAL

S&P Global said its U.S. composite PMI output index, which tracks the manufacturing and services sectors, fell to 47.3 this month from a final reading of 49.5 in September.

That weakening could indicate that the US Federal Reserve’s interest rate hikes to combat inflation have been working and may persuade it to slow its rate-hike policies, a positive sign for fuel demand, said Phil Flynn, an analyst at the Price Futures group.

“The error in the PMI number is a sign that the economy may be slowing down a bit, which turns out to be bullish,” Flynn said.

Brent rose last week despite US President Joe Biden announcing the sale of the remaining 15 million barrels of oil from the Strategic Petroleum Reserves, part of a record release of 180 million barrels. which started in May.

Biden added that his goal would be replenish stocks when US crude hovers around $70 a barrel.

But Goldman Sachs said the share release was unlikely to have a big impact. price impact.

“Such a release is likely to have only a modest (<$5/bbl) influence on oil prices," the bank said in a note.

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Additional reporting by Noah Browning and Florence Tan; Edited by Marguerita Choy and David Holmes

Our standards: The Thomson Reuters Trust Principles.

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