Oil prices have experienced a drop for the first time in three days due to increasing concerns over US economy.
Brent crude dropped 0.5% to $60.19 a barrel, while US crude fell 0.3% to $55.63 per barrel, Reuters reported.
San Francisco Federal Reserve President Mary Daly hinted a note of concern about the strength of the country’s economy, adding that uncertainty and a worldwide growth slowdown are having an impact on the US economy, which she believes has strong momentum. Daly said she was in watch and see mode in assessing the move for another US interest-rate cut.
Earlier this week, US President Donald Trump said that he believed China was sincere about wanting to reach a trade agreement. However, concerns arose after China’s foreign ministry statement that it had not heard of any recent telephone call with the US on trade.
The US Energy Information Administration (EIA) said the market ignored a huge drop in US inventories, which declined last week by ten million barrels, compared with analysts’ estimations for a drop of 2.1 million barrels.
The EIA data showed that US gasoline stocks decreased by 2.1 million barrels and distillate stockpiles, which include diesel and heating oil, fell by 2.1 million barrels.
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The Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers were forced to return to output cuts in 2017 to support prices. The alliance, dubbed OPEC+, renewed the pact in July to limit supply until March 2020.
US weekly crude production also increased 200,000 barrels per day to a new record at 12.5 million bpd in the week to 23 August.