0307 GMT: Crude oil futures were lower during mid-morning trade in Asia Aug. 4 as traders took profit after the overnight rally amid better-than-expected global economic data.
At 11:07 am Singapore time (0307 GMT), the ICE Brent October crude futures was down 30 cents/b (0.68%) from the August 3 settle at $43.85/b, while NYMEX September light sweet crude contract was down by 27 cents/b (0.66%) at $40.74/b.
In the US, IHS Markit July manufacturing PMI released on Aug. 3 stood at 50.9, an improvement from June's 49.8, while the Institute of Supply Management's manufacturing PMI rose to 54.2% in July, up from 52.6% in June, exceeding market expectations.
"However, when it comes to manufacturing output, it continues to suggest it's easier for the central bank and government stimulus to fire up the industrial heartlands," Stephen Innes, chief global markets analyst at AxiCorp, said in an Aug. 4 note.
"Still, it remains a challenge to get people working again or even in some US states to leave their apartment," he added.
Meanwhile, even as the number of new COVID-19 cases in the US has continued to move lower for a fifth consecutive day, from a high of 70,800 cases on July 29 to 47,500 cases on Aug. 2, according to latest data from John Hopkins University, deaths from COVID-19 rose for the fourth week in a row, according to media reports.
On the supply front, with OPEC+ easing into a 7.7 million b/d production cut in August and returning production limited to 1.1 million-1.5 million b/d because of compensation cuts, this increase in global oil supply comes at a time when uncertainty around global demand recovery remains elevated.
"In the larger scheme of things, crude prices have become locked in a tight range and that may remain the case as fundamentally, not much is expected to change on the supply or the demand front," Vandana Hari, founder and CEO of oil consultancy firm, Vanda Insights, said Aug. 4.
"On an intraday basis, bargain-hunting buying or profit-taking shaves off the shallow troughs and peaks. The US dollar, which has been a major influence on crude prices, has also gone into a holding pattern this week. We may see sideway movements in crude unless the US weekly stocks data jolts them out of the current range," she added.
At 11:05 am (0305 GMT), the US dollar index stood at 93.463, down 0.05% from 93.507 at the close.
Market participants will look to fresh cues from the inventory reports by the American Petroleum Institute and the Energy Information Administration on Aug. 4 and 5, respectively.
