Oil Prices Plunge Sharply as Data Shows Weak Demand for Oil

Crude oil prices plunged sharply on Wednesday as US data showed the market had weak demand for oil.

The international benchmark Brent crude dropped $5.11 or 5.6% to close at $85.81 a barrel, while West Texas Intermediate (WTI) fell $5.01 or 5.6% to settle at $84.22 a barrel. Crude prices have now fallen about $10 since the closing of last week.

The decline on Wednesday was the largest one-day drop since August 2022.

The US Energy Information Administration (EIA) reported on Wednesday that domestic stocks of petrol rose by 6.5 million barrels last week in contrast to only a drop of 2.2 million barrels in stocks of crude.

An analyst from JPMorgan noted that demand restraint from rising oil prices is once again becoming visible.

The U.S. 10-year bond yield that recently hit 16-year high at 4.8% is also another major factor that pressured oil prices.

Crude prices made a slight recovery on Thursday morning in the Asian trading hours as Brent rose $0.20 or 0.23% to $86.01 a barrel, while WTI gained $0.12 or 0.14% to $84.34 per barrel.