Oil steady following latest US economic data

Brent’s price has remained steady in the past session as manufacturing activity in the two top oil consumers of the world – the US and China – expanded slightly in August.

IMAGE: Flags of the US and China. Getty Images

The Manufacturing Purchasing Managers' Index (PMI) reading in the US, the world's largest oil consumer, came in at 48.7% in August, up from July’s 48%, the Institute for Supply Management (ISM) reported.

In China, manufacturing PMI came in at 49.4% in August, slightly higher than July's 49.3% growth, market intelligence provider JLC reported citing the country’s National Bureau of Statistics (NBS).

Although a PMI reading below 50 indicates contraction, both data sets point to small growth in the manufacturing sectors of both countries, market analysts said, adding that this has boosted some demand growth expectations for key commodities like oil.

For the US, the PMI data could lead to interest rate cuts at the Federal Reserve's (Fed) September meeting. Lower interest rates in the US can boost demand growth by making dollar-denominated commodities like oil more affordable for holders of other currencies.

By Aparupa Mazumder

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