* U.S. crude oil, gasoline inventories soar as demand stalls
* Chinese oil demand growth also falters amid economic
* Crude futures down over 6 percent since OPEC-led cuts
By Henning Gloystein
SINGAPORE, Feb 8 Oil prices dropped on Wednesday
to extend falls from the previous day, as a massive increase in
U.S. fuel inventories and a slump in Chinese demand implied that
global crude markets remain oversupplied despite OPEC-led
efforts to cut output.
Brent crude futures, the international benchmark for
oil prices, were trading at 54.53 per barrel at 0111 GMT, down
52 cents, or 0.94 percent, from their previous close.
U.S. West Texas Intermediate (WTI) crude futures were
at $51.52 a barrel, down 65 cents, or 1.25 percent.
The slumps on Wednesday came after over 1-percent falls the
Traders said that the sharp declines came on the back of
unexpectedly big increases in U.S. crude and refined product
inventories, as reported by the American Petroleum Institute
(API) on Tuesday.
Crude inventories rose by 14.2 million barrels in the week
to Feb. 3 to 503.6 million barrels, compared with analysts'
expectations for an increase of 2.5 million barrels.
Gasoline stocks rose by 2.9 million barrels, compared with
analyst expectations in a Reuters poll for a 1.1-million barrel
"Weekly data points to U.S. gasoline demand falling sharply
by 460,000 barrels per day (bpd) year-on-year in January, with
such declines only previously during recessions," Goldman Sachs
said in a note to clients following the data release.
However, the U.S. bank said that "this data vastly
overstates a likely modest year-on-year decline in gasoline
demand," and that its "outlook for global strong demand growth
Outside the United States, there were other signs of market
China's 2016 oil demand grew at the slowest pace in at least
three years, Reuters calculations based on official data showed.
China's implied oil demand growth eased to 2.5 percent in
2016, down from 3.1 percent in 2015 and 3.8 percent in 2014, led
by a sharp drop in diesel consumption and as gasoline usage
eased from double-digit growth.
The slowing occurred as the economy expanded by only 6.7
percent in 2016, the slowest pace in 26 years.
Slowing demand and ongoing high inventories undermine
efforts by the Organization of the Petroleum Exporting Countries
and other producers including Russia to cut output by almost 1.8
million bpd during the first half of this year in order to prop
up prices and rebalance the market.
Despite this, both Brent and WTI are down over 6 percent
since early January, when the cuts started to be implemented.
(Reporting by Henning Gloystein; Editing by Joseph Radford)