Today, oil prices are down due to lackluster economic sentiment in China as well as a negative impact on world oil import activities.
Still, prices are still on track for their first monthly gains since September when the lingering Middle East conflict raised supply concerns.
Brent crude for March, which ended today, fell 31 cents (0.4%) to $82.56 a barrel and the more active contract for April fell 29 cents to $82.21.
The price of US West Texas Intermediate (WTI) crude oil also fell 25 cents (0.3%) to $77.57 a barrel.
Based on reports of manufacturing activity in China, the world's largest oil consumer and economy contracted for the fourth month in a row in January. Today's official survey shows economic momentum slowing at the start of 2024.
According to forecasts from several analysts, the Organization of the Petroleum Exporting Countries (OPEC) sees oil demand growth in 2024 centered on Chinese consumption and signs of a slowing economy dampening the outlook.
ING Bank Chief Economist Lynn Song said China's manufacturing sector continues to face pressure due to weak domestic recovery and weak external demand.
However, both oil benchmarks are expected to rise this month as the Israel-Hamas war has widened over the conflict in the Red Sea between the United States and the Iran-backed Houthi group.
Directly, this has disrupted oil and natural gas tanker shipping routes and increased shipping costs. In addition, Iranian military groups have also attacked US forces in Iraq, Syria and Jordan.
Inventory data from the American Petroleum Institute (API) in the US is seen as mixed. Crude oil stocks fell by 2.5 million barrels last week, gasoline inventories rose by 600,000 barrels and distillate stocks fell by 2.1 million barrels.
US government data on oil inventories will be released at 11.30 tonight.
