Brent crude futures for March dropped 27 cents, or 0.3%, to $82.60 a barrel, while the more actively-traded April contract dropped 26 cents to $82.24
Oil dropped on Wednesday as lacklustre economic data in China, the world’s biggest crude importer, weighed on demand sentiment, but prices were set for their first monthly gain since September as widening Middle East conflicts raised supply concerns.
Brent crude futures for March, which expires today, dropped 27 cents, or 0.3%, to $82.60 a barrel by 0441 GMT. The more actively-traded April contract dropped 26 cents to $82.24.
U.S. West Texas Intermediate crude futures dropped 23 cents, or 0.3%, to $77.59 a barrel.
Manufacturing activity in China, the world’s second-biggest economy and oil consumer, declined for a fourth consecutive month in January, an official factory survey showed on Wednesday, indicating economic momentum was flagging at the start of 2024.
Forecasts from several analysts, including from the OPEC, see oil demand growth in 2024 driven primarily by Chinese consumption and signs of a slowing economy there undercut those outlooks.
The Chinese manufacturing sector remains under pressure amid a weak domestic recovery and poor external demand, said Lynn Song, chief economist at ING bank, in a note.
Nevertheless, both oil benchmarks are set to increase this month as the Middle-East conflict has disrupted oil and natural gas tanker shipping routes and added to delivery costs.
Both Brent and WTI are set to rise over 7% in January.
Still, the broadening Middle East conflicts have not halted actual output and the concerns about lower oil demand growth have mitigated the gains from the geopolitical concerns.
The main issue with turning outright bullish on crude oil here is the technical picture remains bearish and is yet to catch up with recent events, said Tony Sycamore, a market analyst with IG.
But Sycamore said the market was concerned that a ceasefire would not necessarily halt the attacks in the Red Sea.
