Oil prices dipped on Thursday, dragged down by China’s weakening economy and record U.S. crude output, although markets remained relatively well supported by supply cuts led by producer club OPEC.
International Brent crude futures were at $66.23 per barrel at 0129 GMT, down 16 cents, or 0.2 percent from their last close.
U.S. West Texas Intermediate (WTI) crude oil futures were at $56.90 per barrel, down 4 cents from their last settlement.
Prices were dragged down by surging American crude oil production, which has risen by more than 2 million barrels per day (bpd) over the last year, to an unprecedented 12.1 million bpd.
Traders said China’s weakening economy also weighed on oil prices.
Factory activity in China, the world’s biggest oil importer, shrank for the third straight month in February. China’s official manufacturing gauge fell to a three-year low, highlighting deepening cracks in an economy facing persistently weak demand at home and abroad.
Still, oil markets remain relatively well supported by supply cuts by the Organization of the Petroleum Exporting Countries (OPEC), which together with some non-affiliated producers like Russia, known as ‘OPEC+’, agreed late last year to reduce output by 1.2 million bpd to prop up prices.
Because of these cuts, U.S. commercial crude inventories fell 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.