Strengthening dollar added pressure on prices, reports said.
Comments by China’s central bank on stabilising inflation expectations had reinforced investor worries that it may drop its pro-growth policy before economic expansion gathers full momentum, weighing on most markets in Asia, Reuters reports.
Oil faced further pressure as the International Energy Agency, IEA, cut its global demand outlook, the news wire said.
Brent crude slipped 12 cents to $108.40 per barrel by Thursday morning, dropping for the fifth straight day. US oil fell 25 cents to $92.27, extending losses for a second day.
“The IEA’s report noted a subdued rate of growth in demand and that is probably weighing,” Reuters quoted ANZ commodity strategist Natalie Rampono as saying in Melbourne.
“But what the market is trying to focus on is China’s tightening policy. A lot of people have been pricing in a strong pickup in oil demand from China this year and some of those expectations may be pared back.”
Prices, particularly the US contract, were also under pressure as crude inventories in the world’s largest oil consumer rose last week, data from the Energy Information Administration (EIA) showed on Wednesday.
Crude inventories rose 2.62 million barrels in the week to 8 March, compared with analysts’ expectations for a rise of 2.3 million barrels.
The rise came as crude imports increased by 227,000 barrels per day to 7.49 million bpd, Reuters stated.
Refinery utilisation fell 1.2 percentage points to 81% of total capacity, according to EIA data, compared with expectations for a rise of 0.2%.
Oil markets are also under pressure from a stronger US dollar, which hovered near seven-month highs against a basket of currencies on Thursday.
The dollar index stood at 82.845, after climbing as far as 83.055 on Wednesday, as US retail sales rose at their fastest clip in five months in February. The report is the latest in a string of data putting the world’s biggest economy well on the recovery path.