Oil prices dipped on Thursday, erasing modest early gains as analysts said a persistent global surplus of crude would keep pressuring the market.

US oil futures plunged below $27 dollar a barrel on Wednesday for the first time since 2003, caught in a broad slump across world financial markets as investors worried that a huge oversupply in crude was coinciding with an economic slowdown, especially in China.

Broad market sentiment remained bearish as producers around the world pump 1 million to 2 million barrels of crude every day in excess of demand, creating a huge overhang of stored oil.

Oil prices erased early gains on Thursday, with front-month West Texas Intermediate (WTI) crude futures trading at $28.23 per barrel at 0610 GMT, down 12 cents from its previous close.

International benchmark Brent was down 9 cents at $27.79, after also hitting its lowest since 2003 in the previous session.

Chinese economy

In addition to worries about global oversupply, concerns are growing that China’s economy could slow further and cut demand in the world’s second-largest oil consumer.

“Lower commodity and oil prices reflect weakening demand,’’ HSBC said on Thursday.

ANZ bank said prices were likely to come under more pressure after the release of the US Energy Information Administration's official oil stocks data later in the day.

OPEC meet

Meanwhile, Venezuela has requested that OPEC hold an emergency meeting to discuss steps to prop up oil prices, although delegates from other members of the oil cartel said such a meeting was unlikely.

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