Oil prices moved in a limited range in early week trading (27/February). Brent oil was down by 0.04 percent at $82.80 a barrel. Meanwhile, WTI (West Texas Intermediate) oil was in the $76.39 barrel range.

The focus of the oil market this week is largely on the China Manufacturing PMI data to be released on Wednesday. In January, China's manufacturing activity expanded and reached the level of 50.1. 

But according to economists' consensus, China's manufacturing data for February is likely to contract below 50.0. Market participants do not want to speculate further.

It is especially on what the release of that manufacturing data will look like. It is these conditions that underlie oil prices barely moving in Asian trade today. 

PMI days can Reflect the China’s Economy 

Arguably, the release of China's Manufacturing PMI data this week will provide investors with clues as to how far the economy in that country will recover in early 2023. 

If China's manufacturing sector is completely mired again in February, it will be a negative catalyst for oil prices to move in the short term. It should be noted, China is the largest consumer of crude oil in the world.

That is why; it plays an important role in oil prices. Despite China's economic data, oil prices are still underpinned by potential supply cuts. 

The reason is that Russia, which is known as one of the world's major oil producers, recently announced that it will cut more production. Based on an information, they may do it starts on March. 

Further Rate Hike is maybe Taken

The move triggers a response to the escalation of the conflict with the West. At the same time, the prospect of a Fed rate hike risks weighing on oil prices in the near term. 

After a number of hawkish opinions from Fed officials, the release of US economic data indicating inflation is still high also strengthened the urgency of further interest rate hikes.

Elsewhere, British mass media reported that EU Commission President, Ursula von der Leyen and British PM Rishi Sunak had reached a final agreement. That was especially on a dispute over the Northern Ireland Protocol. 

This deal has the potential to end the Brexit saga that once triggered the risk of a trade war between the two regions. That is why; it was triggering market enthusiasm. 

GBP/USD Rose by More Than 0.7%

The pound sterling was in the spotlight in trading earlier this week (February 27/27). GBP/USD bounced more than 0.7 percent through the 1.2025 range, while EUR/GBP slipped about 0.3 percent.

This pair was over the 0.8800 range within hours of news circulating. Ursula von der Leyen met with Rishi Sunak to talk about Northern Ireland's protocol issues in Windsor yesterday. 

The initial meeting did not attract much attention. It was as the European Union and Britain have often held similar meetings without any results under the leadership of Theresa May and Boris Johnson. 

However, the BBC reported a senior staffer from the UK Government stated that an agreement has been reached. Steve Baker, the Northern Ireland Minister and a hardline Brexit supporter revealed a thing. 

Rumor about the Final Deal

They told the media that Sunak was close to achieving a "very fantastic outcome" for all parties involved. The two camps are now still continuing talks to finalize the text of the final deal.

However, the public does not yet know the full details. When the final text is over, von der Leyen and Sunak will hold a joint press conference. Sunak will then have to give his report to the British Parliament.

It was as any new deal will be effective once it obtains approval from the Parliament and signed by King Charles III. At the announcement of the deal, and again after the signing of (the deal) in the UK parliament, the analysts expect to see moderate positive movements for sterling and UK stocks.