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Brent crude was down $1.01, or 1.2%, at $83.02 a barrel by 1027
GMT while U.S. West Texas Intermediate crude was down 98 cents,
or 1.2%, at $78.66. Both benchmarks fell by more than $1 earlier
in the session.
Manufacturing data emanating from a host of purchasing managers'
index (PMI) surveys on Wednesday gave a steer on the health of
economies across the globe.
Results so far have been grim. Japan reported shrinking factory
activity for a third straight month in August. Euro zone
business activity also declined more than expected, particularly
in Germany. Britain's economy, meanwhile, looks set to shrink in
the current quarter and is in danger of falling into recession.
U.S. PMI data is expected later on Wednesday.
"What oil watchers should be concerned with is that all of the
predictions of manufacturing PMIs are under 50 ... all in
contraction territory," said John Evans of oil broker PVM.
"Readings below expectations will sound warnings again of lower
oil demand."
Markets are also looking for hints on the outlook for interest
rates when Federal Reserve officials and policymakers from the
European Central Bank (ECB), the Bank of England and the Bank of
Japan head to Jackson Hole, Wyoming, on Thursday.
Crude stocks in the United States continued to fall, dropping by
about 2.4 million barrels in the week ended Aug. 18, according
to market sources citing American Petroleum Institute figures on
Tuesday. That was a slightly smaller draw than the 2.9 million
barrel drop expected by analysts in a Reuters poll.
The weekly report from the Energy Information Administration,
the statistical arm of the U.S. energy department, is due at
1430 GMT on Wednesday.
(Reporting by Paul Carsten and Natalie Grover in London, Yuka
Obayashi in Tokyo and Andrew Hayley in Beijing; Editing by Mark
Potter and David Goodman)
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