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 The lack of any immediate action by the world's largest exporters to
follow through on a proposal to freeze production at January's
levels also continued to undermine the market.
Brent crude futures <LCOc1> were down 12 cents at $34.29 a barrel at
1250 GMT (07:50 a.m. EST), while U.S. West Texas Intermediate (WTI)
crude futures <CLc1> were down 2 cents at $32.13 per barrel.
"The basic overriding position in the oil market at the moment is
that the global production exceeds global demand by quite a wide
margin," said Ric Spooner, chief market analyst, CMC Markets.
In a sign of the excess supply, U.S. crude stockpiles rose 3.5
million barrels last week to an all-time peak above 507 million
barrels, data from the Department of Energy showed on Wednesday.
A slowing global economy also risks hurting demand for oil and
keeping prices very low.
Citi cut its forecast for global economic growth this year to just
2.5 percent, from a previous forecast of 2.7 percent.
"Global growth prospects are worsening further, with deterioration
across advanced economies alongside previous weakness in emerging
markets," Citi economists said in a research note.
A boost for oil prices after Saudi Arabia, Russia, Venezuela and
Qatar last week proposed to keep their output unchanged from
January, provided other major OPEC and non-OPEC producers joined
them, has since faded.
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Iran has already branded the idea "a joke", while Iraq, one of the
largest contributors to rising OPEC output, has said it supports the
freeze, but its production will continue to rise.
"The underlying fundamentals are still bearish and the market is
reacting this morning," PVM Oil Associates Tamas Varga said.
There were some supportive indicators, though, that limited losses
on Thursday.
Strong U.S. demand for gasoline supported crude, although analysts
said this effect would ease.
U.S. gasoline demand stood at 9.06 million barrels per day (bpd)
during the week ending Feb. 19, up from 8.6 million bpd in the week
ending Jan. 22, the Energy Department said.
(Additional reporting by Manesha Pereira; Editing by Sherry
Jacob-Phillips and Susan Fenton)
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