Oil steady as US economic data shows slight expansion

Brent’s price has remained steady as manufacturing activity in the world's two top oil consumers – the US and China – expanded slightly in September.

IMAGE: Flags of the US and China. Getty Images

The Manufacturing Purchasing Managers' Index (PMI) reading in the US, the world's largest oil consumer, came in at 49.1% in September, up from August’s 48.7%, the Institute for Supply Management (ISM) reported.

In China, manufacturing PMI came in at 49.8% last month, slightly higher than August’s 49.4% growth, market intelligence provider JLC reported citing the country’s National Bureau of Statistics (NBS).

For the US, slow growth in manufacturing activity could lead to more interest rate cuts by the US Federal Reserve's (Fed). Lower interest rates in the US can boost demand growth by making dollar-denominated commodities like oil more affordable for holders of other currencies.

While a PMI reading below 50 typically signals contraction, both sets of data suggest slight growth in the manufacturing sectors of the two countries, according to market analysts.

By Aparupa Mazumder

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