WASHINGTON (dpa-AFX) - Oil prices fell on Wednesday, weighed down by data showing an unexpected jump in U.S. crude inventories in the week ended January 26th, and concerns about the outlook for demand after data showed another contraction in Chinese manufacturing activity.
West Texas Intermediate Crude oil futures for March ended down $1.97 or about 2.5% at $75.85 a barrel.
Brent crude futures settled at $81.71 a barrel, losing $1.16 or about 1.4%.
Data from U.S. Energy Information Administration (EIA) showed crude oil inventories in the U.S. increased by 1.2 million barrels last week. Gasoline stockpiles increased by 1.2 million barrels last week, while distillate stockpiles dropped by 2.5 million barrels in the week.
An official survey showed that China's factory activity contracted for a fourth straight month in January as new orders shrank.
The official manufacturing purchasing managers index (PMI) reached 49.2 in January, slightly worse than what economists had expected - suggesting weak demand continues to hamper the economy ahead of the upcoming Lunar New Year holiday.
Lingering worries about China's ailing property sector also sparked demand worries.
The International Monetary Fund (IMF) has warned that real estate investments in China could fall more than expected and for longer, hurting both domestic growth as well as that of trading partners.
Meanwhile, OPEC's oil production dropped by 410,000 barrels per day to 26.33 million barrels per day in January due to voluntary production cuts by some cartel members along with shut-in oil in Libya earlier in the month due to protests.
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