WASHINGTON (dpa-AFX) - Crude oil prices rebounded after early weakness but still settled lower on Thursday, amid renewed concerns about excess supply and likely fall in near term energy demand.
Despite OPEC-led production cuts, concerns over excess supply in the market still remain. Also, with U.S.-China trade tensions resurfacing again and the Chinese economy not showing any great signs of staging a significant recovery anytime soon, oil prices are unlikely to see a sustained rally.
Crude oil futures for February ended down $0.24, or 0.5%, at $52.07 a barrel, well off the day's low of $50.98.
On Wednesday, crude oil futures ended up $0.20, or 0.4%, at $52.31 a barrel.
The Energy Information Administration's report on Wednesday showed crude oil inventories in the U.S. fell by 2.68 million barrels in the week to January 11. That was much higher than the expected drop. In the week ended January 4, crude stockpiles had declined by 1.7 million barrels.
The report also said U.S. crude production rose to a record high of 11.9 million barrels per day last week, as crude exports jumped close to record highs near 3 million barrels per day.
Meanwhile, gasoline inventories rose by 7.5 million barrels last week, more than 2.5 times the expected increase. Distillate stockpiles increased by 2.97 million barrels, compared to forecasts for a gain of nearly 1.6 million.
Crude oil exports from the U.S. have strongly increased during the last few years and analysts expect the trend to remain positive going forward.
In its monthly report, OPEC said, oil output from OPEC members fell by 751,000 barrels per day to 31.6 million bpd in December.
Although OPEC-led supply cuts may tighten markets in 2019, analysts feel that due to global economic slowdown, the production cuts may prove ineffective.
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