Oil prices fall on US fuel inventories, weak China demand

london - US crude oil, gasoline inventories soar as demand stalls

Oil prices slid on Wednesday to extend falls from the previous session, as a big increase in US crude inventories and a slump in Chinese demand implied that global oil markets remain oversupplied despite Opec-led efforts to cut output.

International Brent crude futures were trading at $54.69 per barrel at 1045 GMT, down 36 cents from their previous close.

US West Texas Intermediate (WTI) crude was at $51.69 a barrel, down 48 cents. The declines came on the back of unexpectedly big increases in US fuel inventories, as reported by the American Petroleum Institute (API) on Tuesday. Crude inventories rose by 14.2 million barrels in the week to February 3 to 503.6 million barrels, compared with analysts' expectations in a Reuters poll for a 2.5 million barrel increase.

"If the official data from the US Department of Energy were to show a similar inventory build ... US crude oil stocks would be catapulted to almost a record level," Commerzbank said in a note.

Prices also came under pressure from signs of slowing demand from the world's biggest energy consumer.

China's 2016 oil demand grew at its slowest pace in at least three years, Reuters calculations based on official data showed.

China's implied oil demand growth eased to 2.5 per cent in 2016, down from 3.1 per cent in 2015 and 3.8 per cent in 2014, led by a sharp drop in diesel consumption and as gasoline usage eased from double-digit growth. - Reuters