Oil slipped below 61 dollars a barrel on Thursday as concern over the demand outlook offset a surprise drop in U.S. crude inventories and the prospect of further action by OPEC and its allies to support the market.
In the latest sign of economic weakness that has prompted lower oil demand projections, employment in Germany’s private sector fell for the first time in six years in October, a survey showed on Thursday.
Brent crude LCOc1 fell 39 cents to 60.78 dollars a barrel by 0844 GMT, having risen 2.5 per cent on Wednesday and touched its highest since Sept. 30.
U.S. West Texas Intermediate (WTI) crude CLc1 was down 45 cents at $55.52.
“Oil may now be off its lows, but gains are very gradual and downward pressures, most notably as a result of the subdued global outlook, persist,” said Craig Erlam, an analyst at broker OANDA.
Crude’s gains on Wednesday were supported by an unexpected drop in U.S. inventories.
U.S. crude inventories fell 1.7 million barrels in the week ended Oct. 18, against analyst expectations of a 2.2 million barrel increase, data from the Energy Information Administration showed.
Brent prices have risen 13 per cent this year, supported by a supply pact among the Organization of the Petroleum Exporting Countries (OPEC) and its allies.
Since January OPEC, Russia and other producers have implemented a deal to cut oil output by 1.2 million barrels per day (bpd) until March 2020 to support the market. The producers meet over Dec. 5-6 to review the policy.
Adding further price support, officials have said that extended supply curbs are an option to offset the weaker demand outlook for OPEC crude in 2020.