Investing.com - Oil prices slid on Thursday, pressured lower by a U.S. inventory build and fresh uncertainty around a potential trade deal between the United States and China which weighed on the demand outlook.
U.S. West Texas Intermediate (WTI) crude futures were down 58 cents at $54.47 by 08:59 AM ET (12:59 GMT). On the month, however, they are set for a rise of about 0.5%, their biggest monthly gain since June.
Brent crude futures were down 58 cents at $59.66 a barrel, erasing earlier gains. They had dropped by 1.6% on Wednesday and the contract is set for a monthly decline of about 0.6%.
Chinese officials have doubts about whether it is possible to reach a comprehensive long-term trade deal with Washington and U.S. President Donald Trump, Bloomberg reported earlier in the day, citing unnamed sources.
Overnight, Chinese data showed that factory activity shrank for a sixth straight month in October while growth in the country's service sector activity was its slowest since February 2016.
The protracted trade war between the world’s two largest economies has been weighing on the demand outlook for oil.
Hopes for a breakthrough had been dealt a blow on Wednesday when the summit at which the leaders from the two sides were supposed to meet was cancelled because of violent protests in host nation Chile.
Prices also remained on the back foot after the U.S. Energy Information Administration said Wednesday that U.S. crude inventories rose by 5.7 million barrels in the week to Oct. 25, compared with analyst expectations for an increase of 494,000 barrels.
Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude rose for a fourth straight week, gaining 1.6 million barrels last week, the EIA said.
"The U.S. stock report was anything but encouraging," PVM analysts said in a note.
The American Petroleum Institute had previously reported a decline of 708,000 barrels, raising hopes that official figures would also show a fall.
Cushioning the bearish crude data, the EIA showed gasoline and distillate inventories continued to draw.
--Reuters contributed to this report