Oil prices decreased, losing previous gains on fall in US crude inventories, as concerns of global economic slowdown grows.
Brent crude futures LCOc1 slipped $0.16 to $60.14 a barrel, while West Texas Intermediate (WTI) crude CLc1 futures dropped $0.10 to trade at $55.58 per barrel, reported Reuters.
The Energy Information Administration reported that crude inventories in the US dropped by 2.7 million barrels in the week to 16 August as the refineries increased production. However, data showed that gasoline and distillate stockpiles increased by 312,000 barrels and 2.6 million barrels respectively.
The crude market was also under pressure from slowing global economic activity and continuing trade frictions between the US and China.
Reuters quoted energy analytics firm Kayrros as saying in a note: “Overall oil prices have come under pressure from worries about the China-US trade war, signs of slowing economic activity, evidence of slowing end-user oil demand, and reports of counter-seasonal OECD product inventories.”
Earlier, the US president Donald Trump said that he will address the trade imbalances with China, though congressional researchers highlighted that the impasse will hurt domestic economic output by 0.3% in 2020.
Meanwhile, the crude market received support from the Middle East political tensions. Iranian President Hassan Rouhani warned the US as the latter tightened sanctions to reduce Iranian oil exports to zero.
Probis Securities chief investment officer Jonathan Barratt was quoted by Reuters as saying: “We’ve got the concerns surrounding US and Iran but there’s not really anything to push oil out of the current range. It just seems to be volatile within it.”