Brent futures slipped towards $108 on Wednesday as weak China data renewed concerns over demand growth from the world’s second-biggest oil consumer, but falls in refined product and crude stocks in the United States helped stem losses.
Activity in China’s vast manufacturing sector slowed to an 11-month low in July as new orders faltered, suggesting the economy is still losing momentum. Yet, if US government data validates an industry report that showed surprise drops in US product stocks, particularly gasoline, oil may recoup losses.
Brent crude slipped 29 cents to $108.13 a barrel by 0653 GMT, after settling 27 cents up on Tuesday. US oil fell 16 cents to $107.07, after ending 29 cents higher.
“The weak China data is likely to weigh on prices,” said Lee Chen Hoay, an investment analyst with Phillip Futures. “But a major factor that will support prices is the drawdown in US stocks. Assuming the EIA numbers are in the same direction, crude prices will remain supported.”
The US Department of Energy’s Energy Information Administration (EIA) inventory data is due later in the day.
