-China trade war's adverse impact on global economic growth, crude oil prices tumbled on Tuesday.
Brent crude oil spot prices averaged Dollars 64 per barrel in July, nearly unchanged from the average in June 2019 but $10/b lower than the price in July of past year.
The EIA earlier this week reduced its forecast USA demand for crude and liquid fuels, expecting it to rise 210,000 barrels per day (bpd) this year - 40,000 bpd lower than its forecast last month.
As a result, Brent settled down $2.71, or 4.6 percent, at $56.23 per barrel, the lowest close since early January (the commodity has plunged almost 14 percent since last week); West Texas Intermediate finished $2.54, or 4.7 percent, lower at $51.09.
"The threshold is $60 a barrel and if you go below that for a significant period of time, I would expect supplies to be taken off the market in order to support prices up", said Virendra Chauhan, an oil analyst at Energy Aspects in Singapore.
West Texas Intermediate oil for September delivery added $1.63, or 3.2 per cent, to $52.72 a barrel on the New York Mercantile Exchange as of 7:29 a.m.in London after rising as much as $1.75 earlier.
"Trade war rhetoric will continue to guide markets, but the comments from Saudi Arabia could lead to unprecedented action to stabilize prices", said Alfonso Esparza, a Toronto-based senior market analyst at Oanda.
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U.S. crude oil inventories had declined for seven consecutive weeks prior to last week's build but were still about 2% above the five-year average for this time of year, the U.S. Energy Information Administration (EIA) said.
Both crude contracts fell to their lowest since January on Wednesday after the U.S. Energy Information Administration said U.S. crude stockpiles rose last week after almost two months of decline as imports hit their highest since January.
Prices slumped despite a modest rally in equity markets after the People's Bank of China moved to strengthen the yuan on Tuesday. Weak demand in established markets is spurring Vitol to focus on emerging economies, he said. According to the EIA, Brent spot price forecast has been cut to $64 per barrel in the second half of 2019 and $65 per barrel in 2020 in its August short-term energy outlook (STEO).
Meanwhile, U.S. crude production was set to rise 1.28 million Bpd (Mmbpd), to 12.27 Mmbpd this year.
The oil markets then extended their losses after government data showed a build of 2.4 million barrels in USA crude stockpiles last week, instead of the 2.8 million-barrel draw analysts had expected.
But demand for safe-haven assets such as government debt underscored lingering anxiety over recession risks.