Brent loses momentum following weak Chinese economic data
The front-month ICE Brent contract has shed $0.81/bbl on the day, to trade at $77.61/bbl at 09.00 GMT.
PHOTO: Oil barrels. Getty Images
Upward pressure:
Supply disruption concerns have continued to lend some support to Brent’s price.
Oil production at Iraq’s Rumaila oilfield reduced by 300,000 b/d or about 25% due to a fire last week, according to media reports. The news has added some upward pressure on Brent.
“Oil production at Iraq’s Rumaila field remains down 25%, or 300kb/d after last week’s fire,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked. “The supply disruption could bring the country further in line with the OPEC output quota,” he added.
The US Energy Information Administration (EIA) expects that OPEC+ will continue to restrain production in 2025 and 2026 to prevent oil prices from declining.
Downward pressure:
China's Manufacturing Purchasing Managers' Index (PMI) recorded a growth of 49.1% in January, well below market expectations.
A PMI below 50 signals a contraction in economic activity, reflecting weaker economic health and reduced demand for commodities like oil.
Besides, trade in Brent futures remains muted due to less participation amid the Lunar New Year holidays in China and several Southeast Asian countries.
By Aparupa Mazumder
Please get in touch with comments or additional info to news@engine.online
