Investing.com - Oil prices were higher during U.S. morning hours on Thursday, erasing earlier losses after data showed the U.S. economy remained on a solid footing as 2018 came to a close.
The Bureau of Economic Analysis said that gross domestic product registered a seasonally-adjusted annual rate of 2.6% growth in the final three months of 2018, in line with expectations and down from a rate of 3.4% in the third quarter.
While the GDP report was only preliminary, it would mean average growth for the year was 3.1%, the first yearly print above 3% since 2005.
U.S. West Texas Intermediate crude futures for April delivery on the New York Mercantile Exchange tacked on 17 cents, or around 0.3%, to $57.12 a barrel by 9:10AM ET (14:10 GMT). It fell to a low of $56.44 in overnight trade.
Elsewhere, Brent oil for May delivery on the ICE (NYSE:ICE) Futures Exchange in London was at $66.52 a barrel, well off session lows of $65.91.
Both benchmarks were on the back foot earlier in the day after data showed factory activity in China shrank to a three-year low in February, underscoring deepening cracks in the world's second-largest economy.
“Further evidence of a slowdown in China hit risk sentiment,” said Jasper Lawler, head of research at futures brokerage London Capital Group.
Prices were also dragged down by the fact that U.S. crude oil production continues to rise. It has risen by more than 2 million barrels per day (bpd) over the last year, to an unprecedented 12.1 million bpd, according to EIA data released this week.
Still, oil markets remain relatively well supported by supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) which, together with non-affiliated producers like Russia, agreed late last year to reduce output by 1.2 million bpd to prop up prices. However, the EIA expects the rise in U.S. output will more than offset the barrels taken off the market by the so-called 'OPEC+' agreement.
In other energy trading, gasoline futures dipped 0.1% to $1.759 a gallon, while heating oil inched up 0.1% to $2.025 a gallon.
Natural gas futures advanced 1.1% to $2.830 per million British thermal units, as traders looked ahead to weekly storage data due later in the global day amid expectations for a withdrawal of 171 billion cubic feet.
-- Reuters contributed to this report