Manufacturing data released by a group of PMI surveys on Wednesday highlighted the state of economies worldwide.
The results so far are bleak. Japan reported factory activity contracted for the third consecutive month in August. Business activity in the Eurozone also fell more than expected, especially in Germany. Meanwhile, the British economy appears to be on its way to contracting in the current quarter and is at risk of slipping into recession.
US PMI data is expected to be released later today.
price movements
By 1230 GMT, Brent crude fell $1.31, or 1.6%, to $82.72 a barrel. US West Texas Intermediate crude also fell 1.6 percent to $78.33.
“What should interest oil watchers is that all of the manufacturing PMI forecasts are below the 50-point threshold … they are all in contraction territory,” said John Evans of oil brokerage PVM.
“The readings below expectations will again raise concerns about lower demand for oil,” he added.
Markets are also awaiting hints about the path of interest rates when Federal Reserve officials and policy makers from the European Central Bank, the Bank of England and the Bank of Japan head to Jackson Hole, Wyoming, for an annual meeting tomorrow, Thursday.
Crude oil inventories in the United States continued to decline, according to data from the American Petroleum Institute, which indicated that they fell by about 2.4 million barrels in the week ending August 18. That was slightly less than analysts’ expectations in a Reuters poll, for a decrease of 2.9 million barrels.
The EIA’s weekly report, the statistical arm of the US Department of Energy, is due out at 1430 GMT on Wednesday.
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