Oil prices eased on Friday after three days of gains, with concerns about the state of the global economy amid the US-China trade war keeping prices in check.
US oil fell 6 cents, or 0.1 per cent, to $56.65 a barrel. The contract is heading for a gain of more than 4 per cent this week, boosted by a decline in U.S inventories and the approach of a hurricane towards Florida.
Brent crude was down 10 cents, or 0.2 per cent, at $60.98, after adding 1 per cent on Thursday.
Worries about a slowdown in economic growth due to the US-China trade war and the flow-on to oil demand have kept a lid on price gains, even as falling inventories indicate a balancing market.
China’s commerce ministry said on Thursday the world’s two biggest economies were discussing the next round of face-to-face trade talks scheduled for September, but hopes for progress hinged on whether Washington could create favourable conditions.
The approach of Hurricane Dorian toward Florida raised fears that offshore US crude producers may slow output if the storm passes into the Gulf of Mexico over the weekend.
Dorian is heading toward landfall on the Atlantic coast of Florida over the weekend and may enter into the eastern Gulf of Mexico next week. It is is forecast to strengthen and become a highly dangerous Category 4 hurricane on Sunday, the National Hurricane Center said.
Chevron Corp’s 356,440 barrel-per-day Pascagoula, Mississippi, refinery is closely monitoring the progress of Hurricane Dorian, a company spokesman said on Thursday.
Last month, Hurricane Barry prompted offshore oil companies to shut as much as 74 per cent of production, lifting US crude prices, before it weakened to a tropical storm.
Government data on Wednesday showed US crude stocks dropped last week by 10 million barrels to their lowest since October as imports slowed, while gasoline and distillate stocks each fell by over 2 million barrels.
Inventories at the nation’s main delivery hub in Cushing, Oklahoma, where WTI futures are priced, slumped last week by nearly 2 million barrels to their lowest since December, the data showed.
Cushing stocks have dropped by over 300,000 barrels since the government report, traders said, citing market intelligence firm Genscape’s midweek report.