Oil prices decreased on Thursday as investors carefully anticipated a report on personal consumption expenditures in the United States later in the day for any hints on the direction of interest rates after data showed China's factory activity declined for the fifth consecutive month.

Brent crude slipped 0.1% at $85.77 per barrel meanwhile US WTI dropped 0.1%, at $81.57.

An official factory survey released on Thursday revealed that China's manufacturing activity increased once more in August, adding to worries over the second-largest economy in the world's vulnerability.

The official purchasing managers' index (PMI), as reported by the National Bureau of Statistics, increased from 49.3 in July to 49.7 in August, although it remained under the 50-point threshold that separates contraction from expansion.

Investors are waiting for the U.S. personal consumption expenditures report, which will be released on Thursday, to see how much inflation there is. The Federal Reserve's chosen inflation indicator is the PCE.

In the meantime, the U.S. government reduced its gross domestic product growth rate for the most recent quarter from 2.4% to 2.1%, as reported last month, and information made public on Wednesday revealed that private payroll growth sharply slowed in August.