- Oil futures fell on Wednesday as escalating coronavirus fears and skyrocketing U.S. stocks led to further uncertainty over the recovery of the commodities market.
- West Texas Intermediate crude sank 6.4% to $ 37.04 a barrel. Brent, the international oil standard, fell 5.8% to $ 38.83 per barrel, to intraday lows.
- The resurgence of COVID-19 cases has heightened concerns about demand for oil. France and Germany are reportedly set to impose new lockdown measures to curb the spread of the virus.
- US crude inventories rose 4.3 million barrels last week, the Energy Information Administration said on Wednesday. The increase is the largest since the end of July and suggests that demand in the United States is moderating.
- Watch live oil futures trading here.
Crude oil futures fell further below the key support level of $ 40 on Wednesday, as the surge in coronavirus cases and rising inventories raised new concerns over prolonged market weakness.
Contracts for West Texas Intermediate crude fell 6.4% to $ 37.04 a barrel, the lowest level since early October. Brent, the international oil standard, fell 5.8% to $ 38.83 per barrel, to intraday lows.
Resurgences of coronavirus cases have heightened concerns about whether demand for oil can return to pre-pandemic levels. Prices first fell in March as initial outbreaks hampered travel and caused widespread lockdowns.
Another wave of cases risks a similar drop in demand as oil hovers around $ 40 a barrel. Europe is already taking action to curb the spread of the virus, with Germany and France expected to impose new lockdown measures.
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A Wednesday morning report from the Energy Information Administration contributed to the drop in oil. He said U.S. crude oil inventories rose 4.3 million barrels last week, the biggest increase in inventories since late July. Total inventories stood at 492.4 million barrels, about 9% above the five-year average for this time of year.
The sale of oil joined other slippery markets in choppy trading on Wednesday. The S&P 500 fell the most in nearly two months on novel coronavirus issues. And Cboe’s VIX, the preferred indicator of market volatility on Wall Street, hit its highest level since mid-June.
Futures on WTI were trading at $ 37.11 a barrel at 11:30 a.m. ET, down about 40% year-to-date.
Brent traded at $ 39.03 a barrel, down 41% since the start of the year.
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