NEW YORK, March 2 (UPI) -- A spike in U.S. crude oil inventories and questions about Chinese economic recovery brought an end to a short-term rally in oil prices in Wednesday trading.
Crude oil prices have moved higher in previous sessions in response to proposals from major producers Saudi Arabia, Russia and others to freeze their output of oil at January levels. Russian President Vladimir Putin told oil sector leaders this week in Moscow that finding some way to reinvigorate energy markets was a global priority.
"We can all see how unstable the global hydrocarbon market is," he said.
A rally gained momentum Tuesday in response to the latest stimulus efforts underway in China. Moody's Investors Service nevertheless said it changed its bond rating for the Chinese government to negative from stable.
"We expect a gradual economic slowdown," the ratings agency said in its rationale statement.
Crude oil prices turned negative before the opening bell on Wall Street, mirroring market concerns that started 2016. Brent crude oil was lower by 0.2 percent to trade at $36.72 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, lost 1.1 percent to move to $34.02 before the start of trading.
Weak global economic momentum means less demand for crude oil, leaving markets saturated. Data from the American Petroleum Institute released after the close of trading Tuesday show crude oil inventories grew by 9.9 million barrels for the week ending Feb. 26.
Market weakness has put pressure on supplies, however. The U.S. Energy Information Administration, which releases official inventory figures later Wednesday, said domestic crude oil production in December was off by about 0.5 percent from the previous month.