Oil slides on fuel demand concerns amid coronavirus crisis
Oil futures slid on Thursday on fears that U.S. economic recovery is stalling as the coronavirus crisis lingers and a resurgence in European infections prompted new travel restrictions.
Market worries prompted a rally in the dollar as investors turned to safety, adding pressure to oil prices.
U.S. West Texas Intermediate crude futures slid 0.9%, or 36 cents, to $39.57 per barrel. Brent crude futures lost 0.7%, or 28 cents, at $41.49 per barrel.
Both benchmarks gained slightly on Wednesday after U.S. crude and fuel stockpiles fell last week. Gasoline inventories dropped more than expected, sliding by 4 million barrels. Distillate inventories, including diesel and jet fuel, fell by 3.4 million barrels.
Still, U.S. fuel demand remains subdued due to travel restrictions. On a four-week average, gasoline demand hit 8.5 million bpd last week, down 9% year-on-year.
Prices fell after U.S. business activity slowed in September, Fed officials flagged concerns about a stalling recovery, and Germany and Britain reinforced restrictions to control a second wave of the virus. All these factors affected the outlook for fuel demand.