Crude Oil Futures Settle Sharply Lower On Demand Worries

Crude oil futures declined sharply on Wednesday and settled at a one-week low amid rising concerns about the outlook for energy demand due to rising coronavirus infections in India.

Data showing an unexpected uptick in U.S. crude inventories also weighed on oil prices.

Traders were also following the developments on the U.S.-Iran nuclear talks. According to reports, the U.S. might consider lifting terror sanctions against Iran’s central bank, its national oil and tanker companies and several key economic sectors, including steel, aluminum and others.

West Texas Intermediate Crude oil futures for June ended down $1.32 or about 2.1% at $61.35 a barrel, the lowest close since April 13.

Data released by the Energy Information Administration (EIA) Wednesday morning showed U.S. crude inventories rose by 594,000 barrels in the week to April 16 to 493 million barrels. Analysts had expected inventories to drop by about 3 million barrels.

The American Petroleum Institute (API) on Tuesday reported a build in crude oil inventories of 436,000 barrels for the week ending April 16, while analysts had predicted a draw of 2.860 million barrels for the week.

Another massive surge in new coronavirus infections in India has raised concerns about energy demand from the world’s second most populous country. India is the world’s third biggest oil consumer.

According to data from India’s health ministry on Wednesday, the country saw 295,000 new coronavirus cases in 24 hours.

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