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Oil prices restore some basis, but economic worries weigh



Oil prices rebounded some time on Wednesday, after touching their lowest value close to a month during a previous session over fears that a weakening global economy could reduce demand.

Brent crude rose 12 cents or 0.21% at $ 58.38 a barrel to 0425 GMT, while US intermediate futures in West Texas gained 20 cents or 0.37% at $ 54.14 a barrel.

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Oil prices sank to near one-month low on Tuesday after data This shows that US manufacturing activity shrunk for the first time in August in three years, with euro area production shrinking to the seventh month in August.

But global markets rebounded on Wednesday after a private study showed activity in China's services sector expanded at the fastest pace in the three months in August with new orders increasing, causing the largest hiring increase for more than a year.

China is the world's second largest consumer of oil and the largest importer.

"Giv EurLex-2 en What we saw during the night is likely that people have locked in short pants profits or maybe they will establish new pending debt, we may receive a message from Beijing setting a date for trade talks with the US) "said Michael McCarthy, chief marketing strategist at CMC Markets in Sydney.

A short position is when an investor sells futures with price expectations, while a long position is when a person buys futures to profit from rising prices.

US President Donald Trump on Tuesday warned that it would be "tougher" for Beijing in a second term if trade talks continue, heightening market fears that continuing trade disputes between the US and China could trigger a US recession.

"Market participants are becoming increasingly concerned about recessionary risk," says Stephen Ines, a market strategist at AxiTrader.

"Moreover, given that tariffs pose a significant threat to US growth and, in turn, the health of the world economy, oil prices will remain under pressure, especially if the trade and tariff wars show no signs of dropping out. . "

Data due this week for stock levels in the US will be delayed from Wednesday to Thursday due to Monday's US Labor Day holiday.

US Crude oil reserves may have declined for the third consecutive week, a preliminary poll by Reuters showed on Tuesday.

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On the supply side, Venezuela's oil exports fell in August to their lowest level in 201

9, internal reports and data of Refinitiv Eikon showed after stricter US sanctions.

(Reporting by Jessica Jaganathan and Florence Tan; Editing by Christian Schmolinger)


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