Oil prices edged lower on Tuesday with investor caution ahead of the release of key industrial data from China, the world’s largest oil importer, and the US, the world’s largest oil consumer.
International benchmark Brent crude traded at $83.73 per barrel at 10.21 a.m. local time (0721 GMT), a 0.17% loss from the closing price on Monday of $83.87 per barrel.
The American benchmark West Texas Intermediate (WTI) traded at the same time at $79.95 per barrel, down 0.18% from the previous session close of $80.10 per barrel.
Prices slumped during early Asian trade as market players awaited key industrial reports this week to gauge anticipated demand.
Recent data from the Chinese National Bureau of Statistics (NBS) negatively impacted expectations, putting downward pressure on prices.
The data revealed a drop in industrial earnings of 15.5% between January and July relative to the same period last year.
The NBS is expected to announce the official Purchasing Managers’ Index (PMI) on Thursday, and if the readings signal a further slowdown in China’s industrial activity, prices are expected to drop.
Meanwhile, Chinese Finance Minister Liu Kun pledged on Monday a more proactive fiscal policy and further government stimulus in support of China’s slumping economy.
The government announced an initiative over the weekend to support the nation’s unstable stock market by putting in place a number of measures to attract investment.
Investors are also awaiting crude oil inventory data from the US, which will provide insight into the country’s demand trajectory.
The threat from Storm Idalia, which is moving towards Florida and posing a danger to oil production in the nearby Gulf of Mexico with possible power outages, is restraining more price declines.
US President Joe Biden made an emergency declaration for Florida regarding the storm on Monday and gave assurances that the federal government would fully support the state in preparation for the storm and its aftermath.
Storm Idalia is estimated to reach Florida’s shores early on Wednesday.