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Brent crude futures for March, which expire today, fell 87
cents, or about 1.1%, to $82 a barrel by 1103 GMT. The more
actively traded April contract fell 80 cents, or about 1%, to
$81.70.
U.S. West Texas Intermediate crude futures lost 82 cents, or
roughly 1.1%, to $77 a barrel.
Manufacturing activity in China, the world's second-largest
economy, contracted a fourth straight month in January, an
official factory survey showed on Wednesday.
The latest sign of the country's broader economy struggling to
regain momentum came days after a court ordered the liquidation
of troubled property developer China Evergrande. The real estate
sector accounts for a quarter of China's GDP.
Major forecasters, including the Organization of the Petroleum
Exporting Countries (OPEC), see oil demand growth in 2024 driven
primarily by Chinese consumption.
"The factory data confirms our view that China, at least for
now, is an impediment to global oil demand growth," said Tamas
Varga of oil broker PVM.
The Israel-Hamas war, meanwhile, has expanded to a naval
conflict in the Red Sea between the United States and
Iran-aligned Houthi militants.
While that has disrupted oil and natural gas tanker shipping,
which is driving up delivery costs and starting to affect oil
supplies, a Reuters poll suggested that record production in the
West and slow economic growth will keep a lid on prices and
limit any geopolitical risk premium.
"The main issue with turning outright bullish on crude oil here
is the technical picture remains bearish and is yet to catch up
with recent events," including a deadly drone attack on U.S.
troops near the Jordan-Syria border last week, said IG market
analyst Tony Sycamore.
Yemen's Iran-aligned Houthi group on Wednesday said it would
keep up attacks on U.S. and British warships in the Red Sea in
what it called acts of self defence, stoking fears of long-term
disruption to global trade.
Meanwhile, Israel's offensive in Gaza persisted, though
Palestinian militant group Hamas said it was studying a new
proposal for a ceasefire and release of hostages in Gaza.
(Reporting by Natalie Grover, Colleen Howe and Muyu XuEditing by
David Goodman)
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