Oil falls $2/barrel on economic jitters, U.S. crude stock build

  • U.S. business activity contracts in Jan
  • U.S. crude stocks likely to rise – poll
  • OPEC+ panel unlikely to tweak oil policy at Feb. 1 meeting
  • Oil stocks rose by 3.4 mln bbls last week – sources citing API

HOUSTON, Jan 24 (Reuters) – Crude oil prices slipped on Tuesday on concerns about a global economic slowdown and as preliminary data indicated a bigger than expected build in U.S. oil inventories.

Brent futures for March delivery fell $2.06, or 2.3%, to $86.13 a barrel. U.S. crude fell $1.49, or 1.8%, to $80.13 per barrel.

U.S. business activity contracted in January for the seventh straight month, though the downturn moderated across both the manufacturing and services sectors for the first time since September and business confidence strengthened as the new year began.

The U.S. economy “still could roll over and some energy traders are still sceptical on how quickly China’s crude demand will bounce back this quarter,” OANDA analyst Edward Moya said in a note.

Euro zone business activity made a surprise return to modest growth in January, S&P Global’s flash Composite Purchasing Managers’ Index (PMI) showed. Yet British private sector economic activity fell at its fastest rate in two years.

Economies in the six-member Gulf Cooperation Council (GCC) will grow this year at half the rate of 2022 as oil revenues take a hit from an expected mild global slowdown, according to the median view from a Reuters poll of economists.

Crude stocks rose by about 3.4 million barrels in the week ended Jan. 20, according to market sources citing American Petroleum Institute figures on Tuesday. That was triple the build of about 1 million forecast in a preliminary Reuters poll on Monday.

Official data from the U.S. Energy Information Administration will be released at 10:30 a.m. (1530 GMT) on Wednesday.

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