Oil prices steady near three-month highs

LONDON, July 25 (Reuters): Oil prices were steady on Tuesday, hovering near three-month highs as signs of tighter supplies and pledges by Chinese authorities to shore up the world's second-biggest economy lifted sentiment, while weaker Western economic data weighed.

Brent futures were down 9 cents, or 0.1 per cent, at $82.65 a barrel by 1340 GMT, while US West Texas Intermediate (WTI) crude dipped 7 cents, or 0.1 per cent, to $78.67.

The crude benchmarks have already chalked up four weekly gains in a row, with supplies expected to tighten due to output cuts from the Organization of the Petroleum Exporting Countries (OPEC) and allies.

Earlier-loading Brent contracts are selling above later loadings, a price structure known as backwardation indicating traders see tight supply, with the six-month spread near a two-and-a-half month high.

"On the supply side, whilst remote for now, risks are growing following Russia's escalation and bombing of Ukrainian port infrastructure along the Danube River," ING said in a note saying attacks on grains assets could spill into energy markets.

"The market is starting to become a little nervous over a potential supply disruption."

In China, the world's second-biggest oil consumer, leaders pledged to step up economic policy support. In the euro zone, business activity shrank more than expected in July, a survey showed.

In the United States, business activity slowed to a five-month low in July, a closely watched survey showed, but falling input prices and slower hiring indicate the Federal Reserve could be making progress on its bid to reduce inflation. Markets anticipate 25-basis-point rate hikes from both the Fed and the European Central Bank this week.