Investing.com– Oil prices slipped lower Thursday on concerns of slowing U.S. economic activity, exacerbated by high interest rates, overshadowing a larger-than-expected draw in U.S. inventories. 

At 08:35 ET (12:35 GMT),  fell 0.4% to $83.06 a barrel, while fell 0.4% to $78.94. 

US GDP growth slows 

Data released earlier Thursday showed that U.S. rose 1.3% in the first quarter, a substantial revision lower from the 1.6% initial estimate, and below the 3.4% growth seen in the prior quarter. 

While these showed a slowing in economic growth, worries over elevated inflation levels could mean that the Federal Reserve keeps interest rates high for longer – a trend that is expected to eat further into demand. 

Concerns over high U.S. interest rates have been a key weight on oil prices in recent sessions, as several Fed officials also warned that the bank needed more confidence inflation was easing before it could begin trimming rates. 

To this end, data — which is the Fed’s preferred inflation gauge — is due on Friday, and is likely to factor into the central bank’s outlook on interest rates.

US inventories shrink much more than expected – API 

Data from the showed on Wednesday that U.S. oil inventories shrank nearly 6.5 million barrels (mb) in the week to May 24, much more than expectations for a draw of 1.9 mb.

Gasoline and distillate inventories also saw draws, although the draw in gasoline stockpiles was minimal. 

The data usually heralds a similar reading from , which is due later in the session, but the outsized draw suggested that U.S. fuel demand was picking up with the onset of the travel-heavy summer season, which is usually marked by the Memorial Day weekend. 

OPEC+ meeting due 

Beyond the Fed and interest rates, oil markets were also awaiting a meeting of the Organization of Petroleum Exporting Countries and allies (OPEC+), which is set to take place virtually on June 2. The cartel is widely expected to maintain its current pace of production cuts past an end-June deadline. 

data from China, the world’s biggest oil importer, is also due on Friday, and is set to offer more economic cues on the country.

(Ambar Warrick contributed to this item.)