Oil drops as investors weigh US data, supply fears

Oil settled marginally lower on Wednesday, and prices were on course for their steepest annual decline since 2020 as investors weighed US economic growth and assessed the risk of supply disruptions from Venezuela and Russia.

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Brent crude futures closed down 14 cents, or 0.2%, at $62.24 a barrel, while US West Texas Intermediate (WTI) crude eased 3 cents, or 0.05%, to $58.29.

Both contracts have gained about 6% since Dec. 16, when they plunged to near five-year lows.

"What we've seen over the past week is a combination of position-squaring in thin markets after last week's breakdown failed to gain traction, coupled with heightened geopolitical tensions including the US blockade on Venezuela, and supported by last night's robust GDP data," IG analyst Tony Sycamore said.