Oil futures fell by nearly $1 on Thursday, extending losses from the previous day, as a surprise jump in U.S. crude stocks weighed on the market along with fears of a recession that were heightened by disappointing U.S. retail sales and output data.
Brent crude futures were last down 84 cents, or 1%, to $84.14 a barrel at 0710 GMT, after earlier easing to $83.76. U.S. West Texas Intermediate (WTI) crude futures also declined 91 cents, or 1.1%, to $78.57 a barrel. It earlier fell to a low of $78.13.
"The deterioration in U.S. economic data darkened the (oil) demand outlook as recession fears mount again. Risk-off sentiment has sent growth-sensitive commodities down," said Tina Teng, an analyst at CMC Markets, adding that profit-taking could have played a part also.
manufacturing output recorded its biggest drop in nearly two years, as higher borrowing costs hurt demand for goods.
"This raised the spectre of a recession, with risk appetite suffering as a consequence," ANZ Research analysts said in a client note.
Adding to the pall, data from the American Petroleum Institute showed U.S. crude oil inventories rose by about 7.6 million barrels in the week ended Jan. 13, according to market sources.
The mean average forecast from a Reuters' poll of nine analysts had been for a fall of about 600,000 barrels.
The big build marked the second consecutive week of large inventory increases.
However, distillate stockpiles, which include diesel and heating oil, fell by about 1.8 million barrels against analysts' expectations for a 120,000-barrel increase.
The API report was delayed by a day due to Monday's Martin Luther King Day public holiday in the United States. The government's Energy Information Administration will release its weekly inventory report on Thursday.
