Oil prices were down close to 2 percent on Wednesday, troubled by a frailer oil demand growth and an escalation in U.S. crude inventories in spite of escalating anticipations of continuing OPEC-led supply cuts.
Brent crude futures fell 1.86 percent or $1.16 at $61.13 a barrel, while the U.S. West Texas Intermediate (WTI) dropped 1.95 percent or $1.04 at $52.23 per barrel.
In a monthly report released on Tuesday the U.S. Energy Information Administration (EIA) cut and lowered its forecast for 2019 world demand outlook, estimate by 160,000 barrels per day to 1.22 million barrels per day. EIA also cut its forecast for U.S. crude oil production to 12.32 million barrels per day, 140,000 barrels per day below the May forecast.
U.S. crude stockpiles increase on kept oil prices under pressure.
"Investors have been concerned about the recent rise in stockpiles in the U.S.," ANZ bank said in a note.
According to data from the American Petroleum Institute (API), in the week over June to 482.8 million barrels, U.S. crude inventories soared by 4.9 million barrels with compared analyst anticipations for a decline of 481,000 barrels.
With worries about escalating supply, continuing trade pressures between U.S.-China weighed on prices. President Donald Trump said he was holding up a trade agreement with China on Tuesday.
"Oil prices have struggled to retain bullish gains as traders stay cautious over heightened geopolitical risks and persistent weakness in the global economic backdrop," said Benjamin Lu, commodities analyst at Phillips Future in Singapore.
By the end of June will be the next meeting of the Organization of the Petroleum Exporting Countries (OPEC), the market is seeking to weather the world’s major oil procedures extend their supply cuts.
OPEC, along with non-members including Russia in a group called OPEC+, have limited their oil output by 1.2 million bpd since the start of the year to prop up prices.
An uncertain macroeconomic outlook and volatile production from Iran and others could lead OPEC to roll over supply cuts, Goldman Sachs said in a note.
"We expect such an outcome to only be modestly supportive of prices with our third quarter Brent forecast at $65.5 per barrel," Goldman added.
The Energy Minister for the United Arab Emirates Suhail bin Mohammed al-Mazroui said on Tuesday that OPEC members were close to reaching an agreement on continuing production cuts.
OPEC is set to meet on June 25, followed by talks with its non-members including Russia on June 26. However, Russia suggested a date change to July 3 to 4, sources told a news agency.