- Oil inches up after China moves to support flagging economy

Oil prices inched up on Monday as China implemented measures to support its struggling economy. However, concerns about the pace of growth and potential U.S. interest rate hikes that could dampen fuel demand still lingered. Brent crude rose by 0.2% to $84.67 a barrel, while U.S. West Texas Intermediate crude increased by 0.3% to $80.09 a barrel. Both Brent and WTI experienced losses for the second consecutive week after the U.S. Federal Reserve Chair, Jerome Powell, suggested that further rate hikes may be necessary to control inflation. Despite China’s efforts to boost its markets by halving stamp duty on stock trading, investor sentiment towards China remains negative. The upcoming release of China’s manufacturing purchasing managers’ index (PMI) is expected to reveal more negative economic news, with the PMI likely to remain in contraction territory for the fifth month in a row. The U.S. energy sector also saw a decrease in the number of active oil rigs for the ninth consecutive month in August. Additionally, the formation of Tropical Storm Idalia in the Caribbean, which could potentially strengthen into a hurricane and hit Florida, may cause short-term power outages and provide some support for oil prices. While falling oil inventories and supply cuts from the OPEC+ collective have helped keep oil prices above $80 a barrel, the prospect of easing sanctions on Iran and Venezuela has weakened the narrative of tightening supply.