Oil declines after weak economic datat

Oil prices fell on Thursday with the release of disappointing economic data from major economies, while investors await Federal Reserve Chairman Jerome Powell’s speech on Friday, looking for any indications on the path of interest rates.

And by 0619 GMT, Brent crude fell 19 cents, or 0.2 percent, to $ 83.02 a barrel. US West Texas Intermediate crude also fell 24 cents, or 0.3 percent, to $78.65 a barrel.

Analysts said manufacturing data, released by a batch of PMI surveys on Wednesday, painted a bleak picture of conditions for economies around the world, raising concerns about demand.

Japan reported factory activity contracted for the third consecutive month in August. Business activity in the Eurozone, especially in Germany, also declined more than expected. It seems that the British economy is heading for contraction in the current quarter, which puts it at risk of slipping into recession.

Business activity in the United States came close to recession in August, and growth was the slowest since February.

Meanwhile, as Federal Reserve officials and policymakers from the European Central Bank, the Bank of England and the Bank of Japan meet in Jackson Hole, the issue of raising interest rates for a longer period may dominate the discussions even though inflationary pressures ease.

Sugandha Sachdeva, executive director and chief strategist at Acme Investment Advisors, said the easing of pressure on oil prices was largely due to concerns surrounding a possible drop in demand and oversupply.

On the supply side, Iranian Oil Minister Javad Ochi was quoted by state media as saying that his country’s crude oil production would reach 3.4 million barrels per day by the end of September, despite continuing US sanctions.

Five sources familiar with the matter said U.S. officials are also working on a proposal that would ease sanctions on Venezuela’s oil sector if it moves to hold free and fair presidential elections, allowing more companies and countries to import crude from Venezuela.

US crude inventories fell by 6.1 million barrels in the week ending Aug. 18 to 433.5 million barrels, compared with the 2.8 million barrels analysts had expected in a Reuters poll.