Oil futures failed to hold early gains and settled lower on Thursday amid uncertainty about the outlook for global oil demand, and likely excess supply in the market.
Expectations of more stimulus measures by the Chinese government and data from the American Petroleum Institute (API) that showed a drop in crude stocks last week contributed to oil's gains earlier in the day.
Earlier this week, China's finance ministry announced that it will ramp up fiscal support for consumption next year by raising pensions and medical insurance subsidies for residents as well as expanding consumer goods trade-ins.
West Texas Intermediate Crude oil futures for February settled lower by $0.48 or nearly 0.7% at $69.62 a barrel.
Brent crude futures closed down $0.32 or about 0.43% at $73.26 a barrel.
The American Petroleum Institute figures revealed that U.S oil inventories fell by 3.2 million barrels during the week ended Dec. 20.
Distillate inventories -- which include diesel and heating oil -- fell by about 2.5 million barrels but gasoline inventories rose by 3.9 million barrels.
The latest data from the Energy Information Administration is due on Friday, with analysts anticipating a decline in U.S. crude and fuel inventories.
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