Oil prices curbed early gains to trade flat in Asian trade on Thursday, as weak Chinese data sparked concerns over demand, offsetting some cheer over tighter supplies due to U.S. sanctions on Russia.
Oil was also pressured by strength in the dollar, which firmed sharply on Wednesday after the Federal Reserve left interest rates unchanged and remained non-committal to future rate cuts.
Crude prices rose for the last three sessions, encouraged largely by bets on tighter supplies, after U.S. President Donald Trump threatened steep tariffs against major buyers of Russian oil.
But this momentum was seen fading into Thursday. U.S. inventory data also showed an outsized, unexpected build in overall stockpiles, although gasoline inventories fell.
Brent oil futures for September steadied at $73.26 a barrel, while West Texas Intermediate crude futures rose slightly to $70.10 a barrel by 21:34 ET (01:34 GMT). Both contracts had initially risen as much as 0.3%.
Oil trims gains after weak Chinese PMI data Oil prices curbed their intraday gains just after China released a weak purchasing managers index print for July.
China’s manufacturing PMI shrank more than expected in July, amid disruptions from extreme weather and U.S. trade tariffs.
Non-manufacturing PMI also underwhelmed, with overall business activity in the country barely expanding in July.
The reading ramped up concerns over weak economic activity in the world’s biggest oil importer, which could in turn hurt its appetite for crude.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. Thursday’s PMI data also showed initial support from Beijing’s stimulus measures was now running dry, necessitating more support. China’s Politburo signaled this week that it will dole out more stimulus in the coming months.
Trump threatens secondary tariffs on Russia over Ukraine war Oil’s gains this week were spurred chiefly by Trump threatening to impose steep tariffs on major buyers of Russian crude, in a bid to pressure Moscow into ending its war against Ukraine.
Trump said he will impose more restrictions on Russia’s oil, while imposing 100% secondary tariffs on buyers of Russian crude. China and India are among the biggest buyers of Russian oil.
Trump on Wednesday said India will face 25% tariffs on all its U.S. exports, in addition to an unspecified penalty, over its dealings with Russia. The duty will take effect from August 1.
Trump also warned China against buying Russian oil.
In addition to Russia, U.S. officials also announced fresh sanctions on entities linked to Iran’s oil industry. Markets feared that more U.S. restrictions on Russia and Iran, which are both major global oil producers, will limit overall supplies.
