SINGAPORE: Oil prices dipped on Thursday, paring earlier gains, weighed down by worries about the global economy and bigger-than-expected builds in oil product inventories in the United States, the world’s biggest oil consumer.

Brent crude futures LCOc1 dropped 16 cents, or 0.3%, to $60.14 a barrel by 0634 GMT on Thursday.

West Texas Intermediate (WTI) crude CLc1 futures slipped 10 cents, or 0.2% to $55.58 per barrel.

“Oil markets continue to move lower after the gloomy surprise build in U.S. fuel inventories,” said Stephen Innes, managing partner at Valour Markets.

U.S. gasoline and distillate stockpiles rose more than expected last week, while crude inventories fell as refineries hiked production, the Energy Information Administration said on Wednesday.

“Overall oil prices have come under pressure from worries about the China-U.S. trade war, signs of slowing economic activity, evidence of slowing end-user oil demand, and reports of counter-seasonal OECD product inventories,” energy analytics firm Kayrros said in a note.

Traders were worried about the prospects for global oil demand especially amid trade tensions between the U.S and China, the world’s two biggest economies and oil users.

U.S. President Donald Trump on Wednesday said he was “the chosen one” to address trade imbalances with China, even as congressional researchers warned that his tariffs would reduce U.S. economic output by 0.3% in 2020.

Oil traders, along with equity and bond markets, are awaiting a speech from Federal Reserve Chairman Jerome Powell on Friday at an economic conference in Jackson Hole, Wyoming, that could indicate whether the central bank will continue to cut interest rates and ease monetary policy.

Minutes of the Federal Reserve’s July meeting showed the bank’s board members were deeply divided over whether to cut interest rates as sharply as markets were wagering.

“With positioning in equities, bonds and energy all heavily weighted to this outcome, the resulting correction from a lack of Powell love, could be both ugly and emotional,” said Jeffrey Halley, analyst at OANDA.

Meanwhile, oil markets found some support from the simmering tensions between U.S. and Iran, after Iranian President Hassan Rouhani said if Iran’s oil exports are cut to zero, international waterways will not have the same security as before.

“We’ve got the concerns surrounding U.S. and Iran but there’s not really anything to push oil out of the current range. It just seems to be volatile within it,” said Jonathan Barratt, the chief investment officer at Probis Securities in Sydney. —Reuters