In the US, the Energy Information Administration reported Thursday that inventories of crude oil fell slightly last week, though the decline wasn't as much as analysts were expecting. U.S. West Texas Intermediate (WTI) crude futures fell $3.09 to $53.50 a barrel, a 5.5% loss.
The U.S. Energy Information Administration (EIA) reported crude-oil inventories dropped by around 300,000 barrels last week, to 476.49 million barrels.
Trading in the front-month spread is closely tied to supply and demand at Cushing, the delivery point for USA crude futures.
The Organization of the Petroleum Exporting Countries (OPEC) and its Russia-led allies agreed on December 7 to slash oil production by more than the market had expected.
Oil prices fell over 3% to their lowest in two months on a smaller-than-expected decline in USA crude inventories and fears of a global economic slowdown due to the U.S.
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Which the caller agreed with, but said that "no-deal is about as extreme as you can go". "This is just the beginning", he declared.
"The possibility that tariffs could now be placed on crude arrivals from Mexico at the same time that rising Chinese tariffs are threatening to slow world oil demand growth has pushed nearby WTI to below our expected support at the $56 mark", Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
Chinese Vice Foreign Minister Zhang Hanhui said Thursday that China opposes the use of "big sticks" like trade sanctions, tariffs and protectionism.
The U.S. stockpiles and U.S. crude oil production's return to its record 12.3 million barrels per day.
Weekly U.S. oil inventory data has been delayed by Monday's Memorial Day holiday, with the government's report due on Thursday at 11 a.m. EDT (1500 GMT).
"The only reason that oil hasn't fallen further is that supply remains relatively tight with ongoing Opec supply cuts, tensions in the middle east and Venezuela's on-going political struggles".
Since Opec+ started withholding supply in January, oil prices have risen by roughly 30%. Russian First Deputy Prime Minister Anton Siluanov said on Wednesday that the country would consider a possible extension of its oil output reduction agreement.