Oil prices extended their losses following the release of a US report showing a smaller-than-expected decline in crude inventories.
Crude oil output in the USA showed a record high level of 12.3 million bpd (mbpd) for the week ending May 24, according to data released by the Energy Information Administration (EIA) on Thursday.
Front-month Brent crude futures, the global benchmark for oil prices, were at $65.86 at 0019 GMT, their lowest since March 11.
The drops mean that crude oil futures are on track for their biggest monthly loss since last November.
"This fresh tariff headline offers a "pile on" effect to an oil market that has already been seeing downside pressure from some unexpectedly large US crude supply increases that have been weighing on values across this month of May", Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
EIA says crude oil inventories in the USA decreased by 0.3 million barrels. U.S. West Texas Intermediate (WTI) crude futures fell $3.09 to $53.50 a barrel, a 5.5% loss. -China trade war, capped by a tightening crude market and rising political tensions in the Middle East.
While hopes remain that the United States and Chinese leaders could meet at a G20 gathering in Japan next month to de-escalate their trade dispute, a more immediate focus is Thursday's EIA data, now expected to show a fall of 857,000 barrels.
Louisiana Passes Fetal Heartbeat Abortion Bill, Dem Governor Says He’ll Sign
Meanwhile, hundreds have taken to the streets and are protesting their local governments after these bills were signed into law. Seven other states have passed similar laws, including Missouri, North Dakota, Georgia, Ohio, Iowa, Kentucky and Mississippi.
The API data were released as oil prices are benefiting from output cuts by the major producers and falling supplies from Iran.
Investors were already anxious that the U.S.
"An escalating US-China trade war represents a risk to oil markets", Bernstein Energy said in a note on Thursday.
Many analysts expect the OPEC-led supply cuts to be extended in a meeting to be held either late June or early July as OPEC's de-facto leader Saudi Arabia wants to prevent oil prices falling back to levels seen in late 2018 when Brent slumped to $50 per barrel.
Oil prices slumped after a smaller-than-expected withdrawal from US storage facilities fueled worries about excess supplies.
Iranian May crude exports dropped to less than half of April levels, at roughly 400,000 barrels per day (Bpd) after the USA tightened sanctions on Tehran's main source of income.
The announcement increased fears over economic growth and oil demand.