NEW YORK: Oil prices fell on Wednesday, following most U.S. stock markets lower, on concerns about global economic weakness, forecasts for record U.S. shale production and declining U.S. gasoline prices.
Brent futures were down 70 cents, or 1.1 percent, at $60.80 a barrel by 1:28 p.m. EST (1828 GMT), while the most active U.S. West Texas Intermediate crude contract for March was down 67 cents, or 1.3 percent, at $52.34.
The S&P 500 Index turned negative on concerns about global economic weakness after rising about 0.7 percent earlier in the day.
In addition to the stock market woes, analysts said falling U.S. gasoline prices and rising crude output in the United States was also pressuring the crude market.
"We are paying particular attention to weakening NYMEX crack spreads where an increasingly heavy gasoline market is providing a limiter on near term WTI gains," Jim Ritterbusch, president of Ritterbusch and Associates in Chicago, said in a report.
The crack spread between U.S. gasoline futures and WTI crude on the New York Mercantile Exchange (NYMEX) fell to $6.11 a barrel, its lowest since 2013.
Market participants said they are looking ahead to the U.S. weekly petroleum inventories report, which is expected to show a third weekly drawdown in crude stocks, but gasoline inventories were forecast to build for the eighth straight week.
The weekly report from the American Petroleum Institute (API), an industry group, is expected after the market settles on Wednesday, a day later than usual due to the U.S. Martin Luther King Jr holiday on Monday. Data from the U.S. Energy Information Administration (EIA) will be released on Thursday.
The EIA said on Tuesday it expected shale output to rise to a record high in February.
"Rising oil output from the United States, together with the effects of the U.S.-China trade war and growing prospects of the United States hitting its debt ceiling" were weighing on crude prices, said Abhishek Kumar, senior energy analyst at Interfax Energy in London.
Those bearish market factors offset several bullish influences from around the world, including production cuts led by the Organization of the Petroleum Exporting Countries and declining output from Iran and Venezuela.
Venezuelan opposition leader Juan Guaido declared himself interim president on Wednesday, while hundreds of thousands of Venezuelans poured onto the streets to demand an end to the socialist government of President Nicolas Maduro.
The Trump administration said the United States could impose new sanctions on Venezuela's oil sector as soon as this week if the political situation there deteriorates further.