Oil prices fell 1 per cent on Wednesday, weighed down by swelling U.S. inventories and a plunge in global stock markets amid concerns over an economic slowdown.
U.S. West Texas Intermediate (WTI) crude futures were at $52.61 per barrel down 64 cents, or 1.2 per cent , from their last close, while International Brent crude oil futures were down 56 cents, or 0.9 per cent at $61.52 per barrel.
Oil prices were pressured by a weekly report from the American Petroleum Institute (API) that said U.S. crude inventories rose by 5.4 million barrels in the week to Nov. 30, to 448 million barrels, in a sign that U.S. oil markets are in a growing glut.
Official U.S. government oil production and inventory data is due later on Wednesday.
More broadly, the slide in U.S. oil followed a tumble in global stock markets on Tuesday, with investors worried about the threat of a widespread economic slowdown.
Key to the global economic outlook will be whether the United States and China can resolve their trade disputes. Washington and Beijing announced a 90-day truce last weekend, during which neither side will further increase punitive import tariffs.
But U.S. President Donald Trump threatened on Tuesday to place “major tariffs” on Chinese goods imported into the United States if his administration didn’t reach a desirable deal with Beijing.
Bank of America Merrill Lynch said in its 2019 economic outlook, published on Tuesday, that “most major economies are likely to see decelerating activity”, although it added that “a steady stream of monetary and fiscal stimulus measures” was expected to stem the slowdown.
The bank said it expected Brent and WTI prices to average $70 and $59 per barrel respectively in 2019.
Brent and WTI have averaged $72.80 and $66.10 per barrel so far this year.