WASHINGTON (dpa-AFX) - Crude oil prices plummeted on Thursday on rising worries about a likely drop in energy demand due to the impact of the ongoing trade spat between the U.S. and China on the global economy.
A smaller-than-expected drop in U.S. crude stockpiles last week contributed as well to oil's slide. Although the drop was the first in three weeks, it was much less than what the market had forecast.
West Texas Intermediate Crude oil futures for July ended down $2.22, or 3.8%, at $56.59 a barrel, the lowest settlement since early March.
Brent Crude oil futures were down $2.88, or 3.9%, at $66.54 a barrel around mid afternoon.
According to the data released by the U.S. Energy Information Administration Thursday morning, crude inventories declined by 280,000 barrels barrels in the week ended May 24th, about three times less than what analysts had forecast.
Gasoline inventories were up by 2.2 million barrels last week, against expectations of a modest fall. Meanwhile, distillate stockpiles fell by 1.6 million barrels in the week, the EIA report said.
Late on Wednesday, the American Petroleum Institute released a report that showed U.S. crude inventories to have fallen by 5.3 million barrels last week.
Oil prices tumbled despite OPEC-led output cuts, U.S. curbs on Iran and Venezuela, and supply disruptions due to tensions in the Middle East.
Markets now look ahead to the meeting of the OPEC and allies, scheduled to be held by end June or early July, to know whether there will be an extension of the output-cut agreement entered into late last year.
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