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Oil trades below $98, recovering from two-year low

The price of Brent crude traded at just below $98 a barrel on Tuesday, recovering from its decline to a two-year low; however, the price was capped by soft demand and weak economic data.

 

Reuters reported that November Brent fell down 17 cents to $97.71 a barrel while US crude for October delivery declined 33 cents to $92.59 a barrel.

 

The growth of factory output in China slipped to a near six-year low in August, indicating that the country could be at risk of a sharp slowdown.

 

Meanwhile, the International Energy Agency (IEA) had revised down its global oil demand growth projections for this year and 2015.

 

The manufacturing data in the US was also negative as output declined for the first time in seven months in August.

 

However, the US crude price is estimated to get support from an expected decline in the country's commercial crude oil and gasoline stockpiles last week.

 

A preliminary Reuters survey by six analysts found that crude stocks declined 1.8 million barrels on average last week.

 

The survey was carried out ahead of weekly inventory reports from the American Petroleum Institute (API) and the Energy Information Administration.

 

The news agency said Russia is expected to reduce exports of seaborne Russian Urals and ESPO crude oil blends by 6.2% to 50.17 million tonnes in the last three months of this year from the earlier-quarter.

 

Investors are waiting for the results of the Federal Open Market Committee meeting, which ends on Wednesday, to know if the US will increase interest rates

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