Petroleum prices tumbled more than 4% on Wednesday to new summertime lows, extending recent heavy losses following a surprise build in U.S. crude stockpiles. Fears that demand will shrink due to Washington’s escalating trade war with Beijing have also factored into the situation.
Brent crude futures were down 4.4% midday Wednesday, at $56.35 U.S. a barrel, setting a seven-month low. Prices have lost more than 20% since their 2019 peak in April. U.S. West Texas Intermediate (WTI) crude futures settled down 4.7%, at $51.09 a barrel.
Prices for the black gold fell early on worries about the trade war between Washington and Beijing, then extended losses after U.S. government data showed a build of 2.4 million barrels in U.S. stockpiles instead of the 2.8 million draw analysts had expected.
Data released by the U.S. Energy Information Administration Wednesday also revealed gasoline inventories rose 4.4 million barrels, with U.S. Gulf Coast gasoline stocks hitting the highest on record for this time of year.
Brent has plunged more than 12% since last week as global equity markets went into a tailspin after U.S. President Donald Trump said he would slap a 10% tariff on a further $300 billion in Chinese imports from Sept. 1.
This week, the EIA reduced its forecast U.S. demand for crude and liquid fuels, also cutting its forecast for global crude and liquids consumption by 0.1% for both 2019 and 2020.
Meanwhile, U.S. crude production was set to rise 1.28 million barrels per day to 12.27 million bpd this year.
