Oil prices fell on Thursday on concerns of lower fuel demand as talks this week between the United States and China, the world's two largest oil users, are not expected to help end the trade war between them, adding to anxieties about the global economy.
China, the world's biggest oil importer, has lowered their expectations for talks on Thursday and Friday to end the 15-month-old trade dispute with the United States. U.S. President Donald Trump is set to raise the tariff rate on about $250 billion of Chinese goods to 30% from 25% on Oct. 15 if some signs of progress are not seen, as reported by Reuters.
The trade dispute between the world's two largest economies has disrupted global supply chains and slowed the growth of both countries, limiting the growth of their fuel consumption.
Global benchmark Brent crude futures LCOc1 fell 11 cents, or 0.2%, to $58.21 a barrel by 0354 GMT, while U.S. West Texas Intermediate (WTI) futures CLc1 were down 11 cents, or 0.2%, at $52.48 per barrel.
"Should U.S.-China trade negotiations take a turn for the worst, market pessimism will impose sharp negative pressures on oil prices," said Benjamin Lu, commodities analyst at Phillip Futures in Singapore.
Prices were also weighed down by a report of rising stockpiles in the United States, which is also currently the world's biggest oil producer.
U.S. crude stocks rose 2.9 million barrels in the week to Oct. 4, the Energy Information Administration (EIA) said on Wednesday, more than double analysts' expectations of an increase of 1.4 million barrels.
Additionally, the Organization of the Petroleum Exporting Countries (OPEC) quietly adjusted its production pact to allow Nigeria to raise its output, adding more supply.
OPEC granted Nigeria raised the quota to 1.774 million barrels per day (bpd) from 1.685 million bpd, three OPEC delegates with knowledge of the matter said.
OPEC member Venezuela will also increase its exports despite U.S. economic sanctions that have curtailed shipments from the country.
Indian refiner Reliance Industries Ltd plans to start loading Venezuelan crude after a four month pause, in a further sign of expanding crude supply to the market.