Oil prices closed lower yesterday due to lower economic pressure in major crude importer China and a sharp increase in US crude inventories since the cold weather-induced increase in production this month.
Brent crude for March ended yesterday was down $1.16 (1.4%) to $81.71 a barrel and the more actively traded April contract was down $1.89 (2.3%) to $80.55.
West Texas Intermediate (WTI) crude was also down $1.97 (2.5%) to $75.85. Both benchmarks lost more than $2 a barrel in early trading.
Manufacturing activity in China contracted for the fourth month in a row through January, according to an official survey of factories yesterday.
China's wider economy is struggling to gain momentum days after a court ordered the liquidation of property developer China Evergrande. The real estate sector has accounted for a quarter of China's GDP.
Now, the Organization of the Petroleum Exporting Countries (OPEC) sees oil demand growth in 2024 driven by consumption in China.
Crude oil prices were pressured after US Energy Information Administration data showed weekly crude oil inventories rose by 1.2 million barrels last week compared to analysts' expectations of 217,000 barrels.
US domestic oil production rose back up to 13 million barrels a day earlier after close to 1 million barrels a day. It is the capacity during the cold weather earlier this month.
Meanwhile, the Israel-Hamas war has widened their conflict in the Red Sea between the United States and the Iran-allied Houthi group.
