Crude oil prices rose slightly Thursday amid Middle East tensions and a big fall in U.S. crude stockpiles, Kallanish Energy reports.
But gains were capped as weak Western manufacturing data indicated slowing economic growth and in turn the potential for reduced fuel demand.
Brent crude futures rose 28 cents, or 0.4%, to $63.46 a barrel, after dropping 1% Wednesday, the first fall in four sessions.
U.S. West Texas Intermediate crude settled up 14 cents, or 0.3%, at $56.02/Bbl, having dropped 1.6% in the previous session.
U.S. crude inventories fell by 10.84 million barrels (Mmbbl) last week, the Energy Information Administration reported Wednesday, well above analysts’ expectations for a drop of 4 Mmbbl.
Oil prices have also been under pressure from concerns about global economic growth amid growing signs of harm from the U.S.-China trade war that has continued over the last year.
However, the White House said Wednesday top U.S. and Chinese negotiators would meet next week to continue talks, and global equities edged up on the news.
A number of purchasing manager index (Pmi) results in the U.S. and Europe were weaker than expected.
The German Pmi, tracking the manufacturing and services sectors, hit a seven-year low in July, suggesting a deteriorating growth outlook for Europe’s largest economy. The fall was driven by the auto sector on poor sales to China, Reuters reported.
In addition to those worries are tensions in the Middle East following the seizure of a British-flagged oil tanker in the Gulf by Iranian forces last week.
The military adviser to Iran’s supreme leader was quoted Wednesday as saying any change in the status of the Strait of Hormuz, which Tehran says it protects, would open the door to a confrontation.
Britain, meanwhile, gained initial support from France, Italy and Denmark for its plan for a European-led naval mission to ensure safe shipping in the Gulf.
This post appeared first on Kallanish Energy News.