Brent slips on weak US economic data and growing crude stocks

Front-month ICE Brent has declined by $2.62/bbl on the day, to $85.71/bbl at 09.00 GMT.

PHOTO: Getty Images

Upward pressure:

OPEC+'s Joint Ministerial Monitoring Committee may recommend maintaining the group's current oil output policy at its meeting on 1 February, according to Reuters. In October last year, OPEC+ decided to cut production by 2 million b/d from November and through 2023.

“The JMMC would discuss the economic outlook and the scale of Chinese demand and was unlikely to suggest tweaks to current policy. One said oil's rebound in 2023 made any changes unlikely,” reports Reuters, citing five OPEC+ sources.

Business activity across the Eurozone has increased marginally this month after six months of decline, signalling a diminishing risk of a recession, an S&P Global survey has found.

Downward pressure:

Business activity in the US has contracted for a seventh straight month in January, an S&P Global survey shows. The output decline has been among the steepest the country seen since the global financial crisis.

"Not only has the survey indicated a downturn in economic activity at the start of the year, but the rate of input cost inflation has accelerated into the new year, linked in part to upward wage pressures, which could encourage a further aggressive tightening of Fed policy despite rising recession risks," S&P Global commented.

Going by an American Petroleum Institute (API) estimate, US crude inventories grew by 3.4 million bbls in the week ending 20 January. Official Energy Information Administration (EIA) figures are due to come out at 15.30 GMT today.

By Konica Bhatt

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