Oil slips 1% after Fed disappoints, US crude output rises

Oil prices skidded on Thursday, declining for the first time in six days, after the US Federal Reserve dampened hopes for a string of interest rate cuts and Sino-US talks ended without apparent progress towards resolving a bitter trade dispute.

Brent crude futures, fell 62 cents, or 1 percent, to $64.43 a barrel by 0405 GMT (0705am Riyadh time), having fallen more than $1 earlier in the session.

U.S. West Texas Intermediate (WTI) crude was down 67 cents, or 1.2 percent, at $57.91 a barrel, also having dropped more than a $1 earlier.

The drops came despite a bigger-than-expected decline in inventories in the US and a drop in crude production among OPEC members, along with Libya cutting exports, typically bullish drivers for the market. But US output rose in a market that remains well supplied.

"Supply is plentiful and demand growth is showing signs of weakening globally because of trade conflicts, Brexit and other events that tend to potentially weaken economic growth and, hence, oil demand," Victor Shum, senior partner at IHS in Singapore, said by phone.

"There's a lot of oil out there. US output is growing strongly and in addition to that there is enough spare capacity in Saudi Arabia alone to offset any significant supply disruptions," he added.

Meanwhile, negotiators from the United States and China wrapped up a round of trade talks on Wednesday without visible signs of progress and put off their next meeting until September.

US crude oil stockpiles fell for the seventh straight week, declining to their lowest levels since November even as production rebounded and net imports increased, the Energy Information Administration (EIA) said on Wednesday.

Crude inventories fell 8.5 million barrels in the week ended July 26, far exceeding analysts' expectations for a decrease of 2.6 million barrels.

But output rebounded to 12.2 million barrels per day (bpd), near recent levels, from 11.3 million bpd a week earlier.