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Oil prices edged higher on Wednesday as weak manufacturing data from China raised hopes for more policy support.

Benchmark Brent crude futures rose 0.4 percent to $71.93 a barrel, while U.S. crude futures traded 0.4 percent higher at $68.78.

The manufacturing sector in China fell into contraction in August, the latest survey from Caixin revealed with a manufacturing PMI score of 49.2.

Elsewhere, manufacturing activity in August expanded at a slower rate in Japan, South Korea and Taiwan as chip shortages and factory shutdowns disrupted production.

Manufacturing activity in the euro zone slowed in August to a six-month low, but remained at elevated levels.

Meanwhile, ahead of a critical OPEC meeting that will essentially decide the short-term fate of the oil market, Reuters reported that the producer club has raised its forecast for oil demand next year, a move that might help build a case for raising output.

The group’s experts have reportedly revised its 2022 oil demand growth forecast to 4.2 million barrels per day from the previous forecast of 3.28 million barrels per day.

Also helping the tone, Tuesday’s report from the American Petroleum Institute showed a bigger-than-expected drop in U.S. crude inventories for last week.

Official U.S. Energy Information Administration inventory data is due later in the session.


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