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February 28, 2019 Reuters
Oil prices fell on Thursday, as U.S.-China trade tensions persisted, the Chinese economy showed signs of slowing and record U.S. production undermined OPEC-led output curbs. U.S. West Texas Intermediate (WTI) crude was down 40 cents or 0.7 percent at $56.54.
Brent crude was down 61 cents or 0.9 percent at $65.78 per barrel by 0955 GMT.
Factory activity in China, the world’s biggest oil importer, shrank for a third month in February as export orders fell at the fastest pace since the financial crisis a decade ago.
“Further evidence of a slowdown in China hit risk sentiment,” said Jasper Lawler, head of research at futures brokerage London Capital Group.
U.S. Trade Representative Robert Lighthizer also dampened expectations of a swift resolution to the trade dispute between China and the United States, after progress on key sticking points reported earlier this week had raised hopes.
Lighthizer said issues with China were “too serious” to be resolved with promises from Beijing to purchase more U.S. goods and any deal needed to include a way to ensure commitments were met.
Crude prices have also been dragged down by surging U.S. oil production, rising more than 2 million barrels per day (bpd) in the last year to a record 12.1 million bpd.
Supply cuts by the Organization of the Petroleum Exporting Countries and its allies, such as Russia, a group known as OPEC+, have offered some support since January.
That reduction helped drive down U.S. commercial crude inventories by 8.6 million barrels in the week to Feb. 22 to 445.87 million barrels.
“Crude imports into the U.S. fell 1.6 million bpd last week, to a two-decade low,” ANZ bank said on Thursday.
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