Oil prices fell on Wednesday, pulled down by a U.S. supply glut and a drop in stock markets as China’s government warned of increasing economic headwinds and as Japan was expected to report another quarter of GDP contraction.
International Brent crude oil futures LCOc1 were at $61.14 per barrel at 0705 GMT, down 94 cents, or 1.5 percent, from their last close.
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 vin 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.
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.
In a sign of easing tensions between the world’s two biggest economies, Chinese oil trader Unipec plans to resume U.S. crude shipments to China by March after the Xi-Trump deal at the G20 meeting reduced the risk of tariffs being imposed on these imports, people with knowledge of the matter said.