- Oil contracts sank on Thursday after gloomy commentary from the Federal Reserve and OPEC+ weighed on hopes for a market recovery.
- West Texas Intermediate crude fell as much as 3.3%, to $US41.50 per barrel. International benchmark Brent crude dropped 3%, to $US44.02 per barrel, at intraday lows.
- Fed officials expressed concern about the US economic recovery slowing amid elevated COVID cases, meeting minutes released Wednesday showed.
- Members of OPEC+ raised similar worries, saying in a Wednesday meeting that global oil demand is recovering slower than initially expected.
- Watch WTI crude trade live here.
- Watch Brent crude trade live here.
Oil futures tumbled on Thursday after commentary from Federal Reserve officials and OPEC+ members reignited concerns of a lengthy market slump.
West Texas Intermediate crude contracts for September delivery fell as much as 3.3%, to $US41.50 per barrel. Brent crude, oil’s international standard, sank 3%, to $US44.02 per barrel, at intraday lows. The drop pulls both gauges from five-month highs and keeps the commodity trading within a narrow range.
The decline follows the publication of minutes from the Federal Open Market Committee’s July meeting. Central bank officials raised concerns about the US economic recovery sputtering out as new outbreaks threatened another wave of COVID cases. Stocks sold off in late Wednesday trading on the news.
The gloomy sentiment was backed up abroad by OPEC+ members. The coalition warned in a Wednesday meeting that demand was returning to the market slower than initially expected, and that a resurgence of cases could push a full rebound into 2021. The group also called on Iraq, Nigeria, Angola, and Kazakhstan to deepen production cuts after overproducing in recent months.
Oil contracts largely remained above $US40 per barrel as investors weigh economic reopenings against fresh hotspots. Though the level represents an improvement from April lows, weakened travel activity has dragged on oil demand throughout the pandemic.
Prices have also been vulnerable to the US dollar. The US Dollar Index gained on Wednesday after falling to a two-year low the session prior. A stronger dollar cuts into commodities’ appeal, as fewer are needed to buy futures.
WTI crude traded at $US42.50 per barrel as of 11 a.m. ET Thursday. Brent crude traded at $US44.80 per barrel.
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