Oil down over slowdown in major European economies

ANKARA

Oil prices decreased Wednesday amid weak economic data from Europe and intensified diplomatic efforts to settle the Israel-Palestine conflict.

Global benchmark Brent crude traded at $ 87.97 per barrel at 1129GMT, a 0.11% drop from the closing price of $88.07 a barrel in the previous trading session on Tuesday.

The American benchmark West Texas Intermediate (WTI) traded at the same time at $83.50 per barrel, down 0.28% from Tuesday’s close of $83.74 per barrel.

Tuesday’s data on eurozone manufacturing purchasing managers’ index (PMI), which measures the activity of managers in the manufacturing sector, has raised concerns that a recession in the region will impact oil demand negatively.

Data pointing to the slowdown in major economies such as Germany and the UK also casted doubts on oil demand.

The investors are waiting for the European Central Bank’s monetary policy decisions and the statements of the bank’s head Christine Lagarde after the meeting on Thursday.

Meanwhile the efforts to put an end to the escalating tensions between Israel and Palestine boosted downward price movements, decreasing the concerns that the Middle East turmoil will disrupt oil supply routes.

The release of an Israeli hostage, Yocheved Lifshitz, on Tuesday after she was held in Hamas captivity for two weeks, and the speech in which she praised the Palestinian resistance group, also contributed to the narrative that tensions might ease.

However, further price declines were limited by the American Petroleum Institute’s (API) announcement on Tuesday, estimating a draw in US crude oil stockpiles of 2.6 million barrels, against the market expectation of a rise of 1.5 million barrels.

A decrease in inventory implies an increase in crude demand in the US, assuaging market concerns over falling demand.

The data released by S&P Global showed that the US manufacturing PMI in October, which rose to its highest in six months, also limited prices declines. ​​​​​​​The PMI added 0.2 points to 50.0 in October, up from 49.8 in September, according to flash estimates by the financial services company.

The market expectation for manufacturing PMI, which recorded its highest level since April, was 49.5. A reading below 50 represents contraction, while above 50 indicates expansion in the sector.

• American Petroleum Institute
• Brent crude
• Purchasing Managers’ Index
• West Texas Intermediate