- Brent crude oil fell to a fresh 2018 low on Thursday, while U.S. crude had nearly wiped out all of its gains fro the year.
- Weekly U.S. oil production climbed to 10.25 million barrels per day, while U.S. crude inventories also rose, government data showed on Wednesday.
- Rising Chinese crude imports provided some support for oil prices.
Oil prices fell in volatile trade on Thursday, with Brent crude hitting its lowest in nearly seven weeks, after data showed U.S. crude output had reached record highs and the North Sea's largest crude pipeline reopened following an outage.
Brent crude futures were down 72 cents, or 1.1 percent, to $64.79 a barrel by 2:28 p.m. ET, having hit a 2018 low of $64.42.
U.S. West Texas Intermediate crude futures ended Thursday's session down 64 cents, or 1 percent, at $61.15 a barrel, having come close to wiping out the year's gains earlier in the session.
Both benchmarks slid for a fifth consecutive day, the longest losing streak for Brent since November 2017 and for WTI since April 2017.
Brent futures have lost about 8 percent since hitting a three-year high above $71 in late January.
"Oil prices remain under pressure in today's trading session as market participants continue to digest yesterday's bearish oil inventories report," Abhishek Kumar, senior energy analyst at Interfax Energys Global Gas Analytics in London.
The U.S. Energy Information Administration on Wednesday said crude production last week rose to a record high of 10.25 million barrels per day (bpd). At that level, U.S. production would overtake the current output in Saudi Arabia, the biggest producer in the Organization of the Petroleum Exporting Countries.
U.S. crude inventories rose 1.9 million barrels in the week to Feb. 2 to 420.25 million barrels, EIA said.
Oil prices were also dented by the restart of the Forties pipeline in the North Sea, following an outage the previous day that had sent prices higher when it was announced.
The pipeline, which carries around a quarter of all North Sea crude output and roughly a third of Britain's offshore natural gas production, shut on Wednesday for the second time in two months after a valve closure at a Scottish facility.
"It is now clear that oil prices in late January were too high to keep the oil market balanced in the long term," Commerzbank analysts wrote. "This is because U.S. oil production is now rising so sharply that there is a risk of renewed oversupply if OPEC does not voluntarily renounce market share."
The EIA raised its 2018 average output forecast this week to 10.59 million barrels per day (bpd), up 320,000 bpd from its forecast a week earlier.
Meanwhile, Chinese consumption of oil is rising, as reflected by the surge to a record 9.57 million bpd in imports in January, according to official customs data.
Investors in crude are still sitting on one of the largest bullish positions in history. Money managers own more 1 billion barrels of crude oil through their holdings of U.S. and Brent futures and options.
"This is more a timely correction. I don't believe it's going to come significantly lower," PVM Oil Associates strategist Tamas Varga said.
"The 10-year yields went higher again yesterday so, if you believe in this sort of inverse correlation, then that is bearish as well."
A stronger dollar, on track for its biggest weekly rise since November 2016, was also adding pressure by making it more profitable for holders of other currencies to sell dollar-denominated assets such as oil.
— CNBC's Tom DiChristopher contributed to this report.