UPDATE 10-Oil falls $2/barrel on economic jitters, U.S. crude stock build

Reuters

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        * 
      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
    

  
 (Updates with API data)
    By Arathy Somasekhar
       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  LCOc1  futures for March delivery fell $2.06, or
2.3%, to $86.13 a barrel. U.S. crude  CLc1  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.
    Meanwhile, an OPEC+ panel is likely to endorse the producer
group's current oil output policy when it meets next week, five
OPEC+ sources said on Tuesday, as hopes of higher Chinese demand
driving an oil price rally are balanced by worries over
inflation and a global economic slowdown
    Bank JP Morgan raised its forecast for Chinese crude demand
but maintained its projection for a 2023 price average of $90 a
barrel for Brent crude.
    "Absent any major geopolitical events, it would be difficult
for oil prices to breach $100 in 2023 as there should be more
supply than demand this year," it said in an analyst note.
    Crude oil prices in physical markets have started the year
with a rally on increased buying from China after the relaxation
of pandemic controls and on trader concern that sanctions on
Russia could tighten supply.
    U.S. oilfield services firm Halliburton Co  HAL.N  said its
shale oil-well fracking equipment remains fully booked with oil
prices driving increased drilling.
    Investors have also piled back into petroleum futures and
options at the fastest rate for more than two years as concerns
over a global business cycle downturn eased.
 (Reporting by Arathy Somasekhar, Noah Browning; additional
reporting by Mohi Narayan in New Dehi and Laura Sanicola
Editing by David Goodman, Mark Potter, David Gregorio and Deepa
Babington)
 ((arathy.s@thomsonreuters.com; +1 832 208 3362; Twitter:
@ArathySom;))

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