Crude oil prices slip on global growth concerns

Oil prices fell on Wednesday, pulled down by swelling US inventories and a plunge in global stock markets as China’s government warned of increasing economic headwinds.

International Brent crude oil futures LCOc1 were at $60.87 per barrel at 0508 GMT, down $1.21, or 2 percent, from their last close.

US West Texas Intermediate (WTI) crude futures CLc1 were at $52.33 per barrel, down 92 cents, or 1.7 percent.

Reuters technical commodity analyst Wang Tao said WTI could soon test support at $51.75 per barrel, while Brent was threatening to drop below $60 per barrel again soon.

Oil prices were pressured by a weekly report from the American Petroleum Institute (API) that said US crude inventories had risen by 5.4 million barrels in the week to November 30 to 448 million barrels.

Official US government oil production and inventory data is due later on Wednesday.

More broadly, the slide in US 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 China and the US 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 two world’s biggest economies, Chinese oil trader Unipec plans to resume US crude shipments to China by March, people with knowledge of the matter said.

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.