U.S. crude closed below $70 for the second day in a row after shedding 4% Wednesday.
The West Texas Intermediate contract for January fell 4 cents, or .06%, to settle at $69.34 a barrel. The Brent contract for February lost 25 cents, or .34%, to settle at $74.05 a barrel.
“With the largest global importer of oil (China) shuttering its thirst for crude, pressure remains on prices as the largest producer, the United States, continues with headline output,” PVM Oil analyst John Evans said.
In the previous session, the market was spooked by data showing U.S. output remains near record highs even though inventories fell, analysts at ANZ said in a note.
U.S. gasoline stocks rose by 5.4 million barrels last week to 223.6 million barrels, Energy Information Administration data showed on Wednesday, far exceeding expectations for a 1 million-barrel build.
Concerns about China’s economy also put a lid on oil’s price gains. Chinese customs data showed that crude oil imports in November fell 9% from a year earlier, as high inventory levels, weak economic indicators and slowing orders from independent refiners weakened demand.
While China’s total imports dropped on a monthly basis, exports grew for the first time in six months in November, suggesting the manufacturing sector may be beginning to benefit from an uptick in global trade flows.
Ratings agency Moody’s put Hong Kong, Macau and swathes of China’s state-owned firms and banks on downgrade warnings on Wednesday, just one day after it put a downgrade warning on China’s sovereign credit rating.
Oil prices have fallen by about 10% since the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, announced a combined 2.2 million barrels per day voluntary output cuts for the first quarter next year.
Meanwhile, Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman met to discuss further oil price cooperation on Wednesday as members of OPEC+, which may strengthen the market’s confidence in the impact of output cuts.
OPEC+ member Algeria said on Wednesday it would not rule out extending or deepening oil supply cuts as oil prices fell to a new five-month low even though OPEC+ announced cuts last week.
Russian Deputy Prime Minister Alexander Novak said on Tuesday the group stood ready to strengthen oil production cuts in the first quarter of 2024 to eliminate what he said was speculation and volatility.
Russia has pledged to disclose more data about the volume of its fuel refining and exports after OPEC+ asked Moscow for more transparency on classified fuel shipments from the many export points across the country, sources at OPEC+ and ship-tracking firms told Reuters.