Oil prices steady after rallying on US stock decline, business data

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Oil prices steadied above $88 a barrel on Wednesday after rallying in the previous session on a surprise fall in U.S. crude stocks and a drop in business activity in the world's largest oil consumer. Brent crude futures fell 24 cents, or 0.27%, to $88.18 a barrel by 1024 GMT. U.S. West Texas Intermediate crude futures lost 33 cents, or 0.4%, to $83.03 a barrel. Perceived de-escalation between Iran and Israel could remove another $5-10 a barrel of "the still elevated geopolitical risk premium" in coming months, Goldman Sachs analysts said in a note, putting a $90 a barrel ceiling on Brent. U.S. business activity cooled in April to a four-month low, with S&P Global saying on Tuesday that its flash Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to 50.9 this month from 52.1 in March. U.S. crude inventories fell by 3.237 million barrels in the week ended April 19, according to market sources citing American Petroleum Institute figures. Meanwhile, the Israel-Hamas conflict continues to rage with some of the heaviest shelling in weeks on Tuesday, while sources on Wednesday said Israel is preparing to evacuate Rafah ahead of a promised assault on the city.

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