Oil steady as OPEC supply, weak China data cap prices

FE Team | Published: October 31, 2023 23:12:29

London, Oct 31 (Reuters): Oil prices were steady on Tuesday as a drop in euro zone inflation was balanced by higher OPEC output.
December Brent crude futures, were 21 cents, or 0.24 per cent, higher at $87.66 a barrel by 1342 GMT ahead of their expiry later on Tuesday.
The more heavily traded January contract rose 7 cents, or 0.08 per cent?to $86.42. US West Texas Intermediate crude rose 4 cents, or 0.05 per cent, to $82.35.
Both Brent contracts traded $1 higher earlier in the day, but prices remain below $90 a barrel on weak Chinese economic data and as the conflict in the Middle East remains contained for now.
OPEC crude output rose by 180,000 barrels per day (bpd) in October, according to a Reuters survey, driven principally by Nigeria and Angola.
Euro zone inflation was at its lowest level in two years in October, falling to 2.9 per cent from 4.3 per cent in September according to Eurostat's flash estimate.
But weaker-than-expected manufacturing and non-manufacturing activity data in China stoked fears of slowing fuel demand from the world's No. 2 oil consumer.
Its official purchasing managers' index missed a forecast and dipped back below the 50-point level separating contraction from expansion.
Oil prices had fallen on Monday in part "because Israel's ground offensive in the Gaza Strip is so far proceeding only gradually and has thus not yet sparked any further escalation of the Middle East conflict," Commerzbank analysts said.
But investors continue to be wary of the potential for other countries in the region to enter the conflict.
"Looking at the upside risk cases, if regional powers are pulled more directly into the conflict, oil supply could be threatened. Though not our base case, should Iranian crude exports fall by around 300,000-500,000 bpd, this could further constrain the already undersupplied market," Giovanni Staunovo of Swiss bank UBS said.
Israel's Prime Minister Benjamin Netanyahu dismissed calls for a halt to fighting to ease a humanitarian crisis on Tuesday, as Israeli forces attacked Hamas in the network of tunnels under the Palestinian exclave.