Crude prices dipped on Thursday as strong U.S. gasoline demand failed to counter downward pressure from global overproduction that has left storage facilities swelling with unsold oil.
A slowing global economy, which Citi said would grow by just 2.5 percent this year compared to a previous forecast of 2.7 percent, also weighed on Brent, traders said.
“Global growth prospects are worsening further, with deterioration across advanced economies alongside previous weakness in emerging markets,” Citi economists wrote in a research note.
The international Brent crude benchmark was trading at $34.17 per barrel at 0242 GMT, down 24 cents from its last close, hit by global oversupply that sees 1 million to 2 million barrels of crude produced every day above demand.
U.S. West Texas Intermediate (WTI) crude futures were down slightly less, losing 16 cents to $31.99 per barrel, receiving some support from strong gasoline demand.
“Strong gasoline demand led to a stock decline,” ANZ said on Thursday.
U.S. gasoline demand stood at 9.06 million barrels a day on Feb. 19 compared with 8.6 million on Jan. 22.
Despite this, overall U.S. crude stockpiles rose 3.5 million barrels last week to reach an all-time peak above 507 million barrels, weighing on crude futures.