Oil futures were largely flat on Thursday, reversing gains made earlier in the day, as fears over the worsening global economic outlook that hit prices hard in the previous session offset modest hopes for progress in resolving the US-China trade war.
Brent crude oil futures were 3 cents lower, or 0.1 per cent, to $57.66 a barrel by 0657 GMT, after tumbling 2 per cent in the previous session.
Meanwhile US West Texas Intermediate (WTI) crude futures were up 9 cents, or 0.2 per cent, to $52.73 a barrel, after sinking by 1.8 per cent on Wednesday.
“What's impossible to ignore is the economic realities being signalled in the latest run of doom and gloom financial market data which offers few if any reason for oil investors to be optimistic over the outlook for global demand,” said Stephen Innes, market strategist at AxiTrader.
World equity benchmarks hit their lowest levels in a month on Wednesday as signs of a slowdown in US economic growth and weak earnings in Europe fanned fears the global economy could slip into recession.
“While the near-term triggers may continue to relate to oil demand, next week US-China trade talks remain the unknown variable which could lend a modicum of support,” said Innes.
In a note, ANZ Bank said the market was “clearly fixated” on the potential impact of weak economic growth on oil demand, with supply-side issues taking a back seat for the moment.
Also hurting sentiment in the previous session was US crude inventories rising 3.1 million barrels last week, according to the country's Energy Information Administration, far exceeding analyst expectations for an increase of 1.6 million barrels.
Brent futures are now well below levels seen before the Sept. 14 attacks on Saudi Arabia oil facilities that briefly halved more than half the kingdom's output.
“But with the unrest in Middle East I am keeping a cautious eye on not being too bearish,” said Jonathan Barratt, chief investment officer at Probis Securities in Sydney.