(Bloomberg) -- Oil headed for its biggest drop in more than a week on signs the worsening U.S.-China trade war will take a toll on global economic growth.

Futures in New York fell as much as 1% after Federal Reserve Bank of Boston President Eric Rosengren said the trade standoff is adding a downside risk to his economic forecasts and the Organization for Economic Cooperation and Development downgraded its projection for global growth. The American Petroleum Institute was said to report U.S. crude stockpiles rose by 2.4 million barrels last week, putting more downward pressure on prices.

Oil has swung between gains and losses this month as investors assessed conflicting demand and supply signals. The Organization of Petroleum Exporting Countries and its allies have suggested they may extend production cuts at a time when rising tensions in the Middle East and unplanned outages from Libya to Venezuela are tightening the supply picture. Meanwhile, the sudden deterioration in U.S.-China relations suggests the trade war is here to stay.

“While forecasts by the OECD and others suggest demand growth will slow, OPEC is expected to control supply,” said Miyoko Nakashima, a senior strategist at Mizuho Securities Co. in Tokyo. “That means there is a limited upside, but prices may stay in a relatively stable range.”

West Texas Intermediate crude for July delivery fell 50 cents, or 0.8%, to $62.63 a barrel on the New York Mercantile Exchange at 9:47 a.m. in Singapore after dropping as much as 62 cents earlier. The last time WTI closed down more than 1% was on May 13. The June futures expired on Tuesday.

Brent for July settlement fell 32 cents, or 0.4%, to $71.86 a barrel on the London-based ICE Futures Europe exchange after closing up 21 cents on Tuesday. The global crude benchmark traded at a $9.22 premium to WTI.

--With assistance from James Thornhill.

To contact the reporter on this story: Tsuyoshi Inajima in Tokyo at tinajima@bloomberg.net

To contact the editors responsible for this story: Serene Cheong at scheong20@bloomberg.net, Andrew Janes, Ben Sharples

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