08:55 AM EDT, 07/25/2024 (MT Newswires) -- Oil prices weakened early on Thursday as worries over the health of Chinese demand offset falling U.S. inventories, while a report showed the U.S. economy grew at a faster than expected pace in the second quarter.

West Texas Intermediate crude oil for September delivery was last seen down US$1.13 to US$76.46 per barrel, while September Brent crude, the global benchmark, was down US$1.15 to US$80.56.

The drop comes despite a Wednesday report from the Energy Information Administration showed U.S. oil inventories last week fell by 3.7-million barrels, the fourth-straight weekly drop, while gasoline inventories fell by 5.6-million barrels, showing solid summer demand.

The bullish inventory report was followed by Thursday's release of second-quarter U.S. gross domestic product data which showed its economy grew at a 2.8% pace in the period, up from 1.4% in the first quarter and well ahead of the consensus estimate for a rise of 2.1%, according to Marketwatch.

However solid U.S. demand was offset by more signals demand in China, the No.1 importer, is waning as its economy continues to struggle amid a debt crisis in its real-estate sector as its government offers minor stimulus measures.

"China put in another surprise by cutting the one-year medium-term lending facility (MLF) this morning by 20-basis points. However, a cool reaction from both markets and commentators is witnessed, for while 'easing' in policy should be welcomed, it is very different from actual stimulus needed for beleaguered sectors such as property," PVM Oil Associates noted.