Crude oil prices plunged sharply on Tuesday, extending recent losses, and settled at a fresh 4-year low, amid concerns about outlook for energy demand.
Global central banks and several governments have announced stimulus measures, aiming to limit the impact of the coronavirus outbreak on the global economy, but concerns about energy demand continue to linger.
A price war between Saudi Arabia and Russia following recent disagreement in OPEC+ meeting about production cuts weighed on the commodity.
U.S. President Donald Trump’s warning that the U.S. may be heading into a recession amid slowing global economic activity, and a report from Societe Generale that warns “oil demand destruction” will peak in the second quarter, also contributed to the drop in oil prices.
West Texas Intermediate Crude oil futures for April ended down $1.75, or about 6.1%, at $26.95 a barrel, the lowest settlement price since February 2016.
Brent Crude oil futures were down 3.2% at around $29.00 a barrel.
On Monday, WTI crude oil futures for April ended down $3.03, or about 9.6%, at $28.70 a barrel, not far off the day’s low of $28.03 a barrel.
Meanwhile, traders were looking ahead to weekly oil inventory data from the American Petroleum Institute (API) and Energy Information Administration (EIA).
While data from API is due later today, the EIA’s inventory data will be out Wednesday morning.
The material has been provided by InstaForex Company – www.instaforex.com