Oil tumbles 6% on surging COVID-19 cases and inventory buildups
- Oil futures tumbled on Wednesday as escalating coronavirus fears and surging US stockpiles drove new uncertainty about the commodity market's recovery.
- West Texas Intermediate crude sank as much as 6.4%, to $37.04 per barrel. Brent crude, oil's international standard, tumbled 5.8%, to $38.83 per barrel, at intraday lows.
- Resurgences in COVID-19 cases have intensified concerns about oil demand. France and Germany are reportedly set to impose new lockdown measures to curb the virus' spread.
- US crude inventories climbed by 4.3 million barrels last week, the Energy Information Administration said Wednesday. The uptick is the biggest since late July and suggests demand in the US is moderating.
- Watch oil futures trade live here.
Crude-oil futures plummeted further below the key $40 support level on Wednesday as surging coronavirus cases and rising stockpiles drove fresh concern about prolonged market weakness.
Contracts for West Texas Intermediate crude sank as much as 6.4%, to $37.04 per barrel, the lowest level since early October. Brent crude, oil's international standard, tumbled 5.8%, to $38.83 per barrel, at intraday lows.
Resurgences in coronavirus cases have intensified concerns about whether oil demand can return to pre-pandemic levels. Prices first plummeted in March as initial outbreaks curbed travel activity and prompted widespread lockdowns.
Another wave of cases risks a similar decline in demand as oil hovers at about $40 per barrel. Europe is already taking action to curb the virus' spread, with Germany and France reportedly set to impose new lockdown measures.
A Wednesday-morning report from the Energy Information Administration added to oil's slump. It said US crude-oil inventories climbed by 4.3 million barrels last week, the biggest stockpile increase since late July. Total inventories stood at 492.4 million barrels, roughly 9% higher than the five-year average for this time of year.
The oil sell-off joined other sliding markets in choppy Wednesday trading. The S&P 500 tumbled by the most in nearly two months on new coronavirus concerns. And Cboe's VIX, Wall Street's preferred gauge of market volatility, surged to its highest level since mid-June.
WTI futures traded at $37.11 per barrel as of 11:30 a.m. ET, down roughly 40% year-to-date.
Brent crude traded at $39.03 per barrel, down 41% year-to-date.
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