Oil prices dropped to more than two-week lows yesterday, as global stock markets fell, with investor sentiment made more bearish by the United States government data that showed domestic crude inventories rose more than expected last week.
Brent crude futures fell by $2.08 or 2.5 percent to $81.01 a barrel. The contra posted a session low of $80.69, its weakest since September 24. The global benchmark has retreated after hitting a four-year high of $86.74 on October 3.
U.S. West Texas Intermediate (WTI) crude CLc1 futures fell $1.81, or 2.5 percent, to $71.36 a barrel. WTI hit a session low of $71.08, the lowest since September 21.
Crude inventories rose by six million barrels in the week to October 5, data from the Energy Information Administration showed yesterday. Analysts had expected an increase of 2.6 million barrels.Refinery crude runs fell by 352,000 barrels per day, EIA data indicated, while utilization rates dropped by 1.6 percentage points.
Falling U.S. equity markets and a global risk-off environment also weighed on crude futures. On Wednesday, U.S. stock markets tumbled, with the S&P 500 and the Dow Industrials indexes posting their worst day in eight months, as solid economic data reinforced expectations of multiple interest rate hikes next year.
OPEC cut its forecast of global demand growth for oil in 2019 for a third straight month, citing headwinds facing the broader economy from trade disputes and volatile emerging markets.