An oil well is seen near Denver, Colorado. Picture: Reuters
An oil well is seen near Denver, Colorado. Picture: Reuters

Sydney/Singapore — Oil prices declined on Thursday amid lingering concern over slowing global economic growth that may limit fuel demand and after a surprise build in US crude inventories.

International Brent crude oil futures were at $60.89 a barrel at 3.52am GMT, down 25c, or 0.4%, from their last settlement, having closed down 0.6% in the previous session.

US West Texas Intermediate (WTI) crude futures were at $52.40 a barrel, 22c lower from their last settlement.

“Crude oil came under further pressure as concerns of faltering global growth remained at the forefront in investor’s minds,” ANZ Bank said.

The prospects of future oil demand are getting clouded by the global growth worries, analysts said.

“With the IMF downgrading 2019/20 and the continued rhetoric from Davos reiterating that they expect global growth to slow down over the next two years, is providing selling pressure in oil,” said Hue Frame, portfolio manager at Frame Funds in Sydney.

Earlier this week, the International Monetary Fund (IMF) cut its world economic growth forecasts for 2019 and 2020, due to weakness in Europe and some emerging markets.

Meanwhile, world leaders and top executives are meeting in Davos, Switzerland, this week to discuss how to steer policy amid worries of slowing economic growth, damaging trade wars and Brexit.

Oil market sentiment was also weakened by an increase in US crude inventories after refineries cut output, data from industry group the American Petroleum Institute (API) showed on Wednesday.

Crude inventories rose by 6.6-million barrels in the week ended January 18 to 443.6-million, compared with analysts’ expectations for a decrease of 42,000 barrels, the API said. Refinery runs fell by 152,000 barrels a day.

“Sharp production cuts by Opec plus have kept crude oil futures supported however as market reports indicate for a marked output reduction in December 2018,” said Benjamin Lu, analyst at Phillip Futures.

“Though oil prices have demonstrated for higher upside potential in the first quarter of 2019, mounting economic challenges will continue to impede exponential gains in the longer term,” Lu said.