Crude prices rose sharply over the past two weeks, as optimism over lower interest rates helped prices rebound from near three-year lows.
But this rebound stalled in recent sessions, as middling readings on business activity from several major economies raised concerns over slowing demand.
Brent oil futures expiring in November rose 0.2% to $74.07 a barrel, while West Texas Intermediate crude futures rose 0.3% to $69.82 a barrel by 20:40 ET (00:40 GMT).
Mixed purchasing managers index readings from the U.S., euro zone, and more recently, Japan, raised concerns over slowing manufacturing activity, which could herald sluggish demand for crude.
While growth in services PMIs showed some resilience in overall business activity, the prospect of an extended manufacturing slowdown presented more potential headwinds for crude.
The middling PMIs added to concerns that oil demand will slow as global economic conditions worsen in the coming months, although oil bulls are hoping that interest rate cuts from several major central banks will help offset this trend.
Traders were still seen attaching some risk premium to crude, as a war in the Middle East showed little signs of de escalation.
Israel bombed several Hezbollah-linked targets in Lebanon on Monday, marking a further potential escalation in its long-running conflict with the Lebanese military group. The country also kept up its offensive against Hamas in Gaza.
Concerns over a bigger conflict in the Middle East saw oil traders pricing in the possibility of more supply disruptions. This notion also factored into oil’s rebound over the past two weeks.
In the U.S., focus was also on tropical storm Helene- the second major storm to hit the Gulf of Mexico this month, after Hurricane Francine tore through the oil-rich region.
Extended supply disruptions in the region present a tighter outlook for U.S. oil markets, which could boost prices in the near-term.
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