U.S. West Texas Intermediate crude futures fell 86 cents, or 1.4 percent, to settle at $ 60.64 a barrel. Factory activity growth in China fell to a nine-month low in February, raising alarm about the world’s second largest economy’s crude purchases and putting pressure on oil prices.
Phil Flynn, senior analyst at Price Futures Group in Chicago, said, “There is talk that their strategic reserves are overflowing, and therefore some are betting that the Chinese will not continue to pay oil prices.”
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Investors are also concerned that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, who make up the so-called OPEC + group, will soon increase oil production.
“The concern is that this will end up adding up to 1.5 million barrels (per day) to the market,” said Bob Younger, director of energy contracts at Mizuho.
OPEC + meets on Thursday and may discuss allowing up to 1.5 million bpd of crude to return to the market.
Oil prices were also under pressure in today’s session from the rise in the dollar, which makes commodities denominated in the US currency more expensive for holders of other currencies.