By Ken Afor
In Asian trading on Thursday, oil prices dropped due to manufacturing data from China that was less than anticipated.
However, investors remain cautiously awaiting the outcome of the OPEC+ meeting where a decrease in output is expected.
At 0024 GMT, Brent crude futures dropped by 28 cents, or 0.3%, to $82.90 per barrel, whereas U.S. West Texas Intermediate crude futures decreased by 24 cents, or 0.3%, to a price of $77.68 per barrel.
China’s manufacturing activity experienced its second consecutive month of contraction in November, and at a faster rate than anticipated, according to an official factory survey released on Thursday.
This development suggests additional policy initiatives are necessary to bolster the economic growth of the world’s largest petroleum importer.
In November, the official Purchasing Managers’ Index (PMI) dropped to 49.4 from the previous month’s 49.5, remaining below the 50-point threshold to represent decreases instead of increases. The Reuters survey of analysts had estimated a 49.7 reading.
On Wednesday, the U.S. Energy Information Administration declared a sudden buildup of U.S. crude oil and distillate fuel stores in the prior week, demonstrating inadequate utilization. The data also indicated that gasoline stocks increased higher than anticipated.
In the preceding period, the oil markets derived encouragement from expectations that the OPEC+ coalition, comprising the Organization of Petroleum Exporting Countries and entities such as Russia, would find an approach to bolster prices.
A policy meeting of OPEC+ is set to occur on Thursday, with discussions regarding potential additional production cuts occurring prior to this.
Sources close to the organization conveyed to the outlet that details of the cuts had still to be finalized.
Another news outlet reported on Wednesday that the decrease in production could reach as much as 1 million barrels daily.
