Crude oil prices plunged to their lowest level since December 2021 on Wednesday, amid rising concerns about global economic growth and worries about the outlook for energy demand.
Data showing an increase in U.S. crude inventories hurt oil prices.
The crisis in in the banking sector following the collapse of Silicon Valley Bank, and the debt woes of Swiss lender Credit Suisse has raised concerns the global economy could see a significant slowdown in the near to medium term.
West Texas Intermediate Crude oil futures for April ended lower by over 5% at $67.61 a barrel.
Brent crude futures settled at $74.36 a barrel, losing about 4%.
The International Energy Agency (IEA) said in its report today that oil has been accumulating in storage tanks as supply has been strong and demand has remained slack.
“The market is caught in the crosscurrents of supply outstripping still-lacklustre demand, with stocks building to levels not seen in 18 months,” the monthly IEA report said.
Russia has said it will decrease production by 500,000 barrels a day starting this month in response to sanctions, which could start to swing the balance toward a supply deficit.
Data from Energy Information Administration (EIA) showed U.S. crude inventories rose by 1.55 million barrels during the week ended March 10.
Gasoline stockpiles dropped by 2.061 million barrels last week, while distillate stockpiles fell by 2.573 million barrels.
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