Oil prices steadied on Thursday, following sharp overnight losses as US crude inventories unexpectedly rose, fears of recession mounted and economic data out of China and Europe disappointed.
Brent crude was down 13 cents, or 0.2%, at $59.35 a barrel by 0643 GMT, after falling 3% in the last session.
US crude was up 5 cents, or 0.1%, at $55.28 a barrel, having dropped 3.3% in the previous session.
The combination of a slew of data suggesting a slowdown in global growth amid the US-China trade war and persistently high levels of oil in US storage has punctured recent optimism in crude markets, but stoked expectations that leading producers may take further steps to support prices.
“Oil prices, though supported by OPEC-led production curbs … face severe headwinds as traders swing between demand-side worries and supply curtailment policies,” said Benjamin Lu, analyst at Phillip Futures in Singapore.
The Organisation of the Petroleum Exporting Countries (OPEC) has been mostly trimming production since the start of 2017 and traders say they expect Saudi Arabia to reduce output further amid slowing global oil demand.
The US Treasury bond yield curve inverted on Wednesday for the first time since 2007, a sign of investor concern that the world’s biggest economy may fall into recession.
China reported disappointing data for July, including a surprise drop in industrial output growth to a more than 17-year low, underlining widening economic cracks as the trade war with the US intensifies.
Global economic worries, amplified by tariff conflicts and uncertainty over Brexit, are also hitting European economies. A slump in exports sent Germany’s economy into reverse in the second quarter, data showed, while the euro zone’s GDP barely grew in the second quarter of 2019.