Crude oil futures settled lower on Thursday, extending losses from the previous session, amid rising concerns about concerns over excess supply in the market and outlook for energy demand.
Lingering worries about the economic impact of the coronavirus pandemic and possibility of fresh lockdown measures have resulted in increased concerns about energy demand. An escalation in U.S.-China tensions is also adding to the concerns.
West Texas Intermediate Crude oil futures settled at $41.07 a barrel, losing $0.83 or about 2%.
Brent Crude futures declined $0.98 or 2.2% to $43.31 a barrel.
Data released by the Energy Information Administration (EIA) on Wednesday showed that crude inventories in the U.S. increased by 4.9 million barrels last week, nearly 2.5 times the expected increase.
The EIA data also showed that oil stored at the Cushing, Oklahoma, facility rose 1.37 million barrels last week. That was nearly two times the expected surge.
In geopolitical news, the Trump administration’s decision to close China’s consulate in Houston over concerns about spying has sent U.S.-China relations to a new low.
China vowed to retaliate and said the unilateral closure within a short period of time is an unprecedented escalation of its recent actions against China.