Oil prices slid on Wednesday, falling alongside stocks and other risky assets, after downbeat economic news from China and Germany fueled fresh worries about a slowdown in global growth.
U.S. crude futures fell 3.3% to $55.23 a barrel on the New York Mercantile Exchange, logging their third decline of at least 3% already in August. Brent crude, the global gauge of oil prices, slipped 3% to $59.48 a barrel on the Intercontinental Exchange—a day after posting a 4.7% increase, its largest gain of 2019.
Wednesday’s reversal was driven by data showing the German economy shrank in the second quarter and a number of Chinese economic indicators that missed expectations, the latest worrisome developments for investors wary of oil demand softening. Fears about weaker consumption and steady supply have left U.S. crude about 17% below its April peak.
Although prices gained Tuesday after delays on some U.S. tariffs on Chinese imports spurred optimism across markets, some analysts are concerned that trade uncertainty will continue to stoke volatility in the coming weeks.
“The global oil demand path appears poised for additional deterioration,” said
president of Ritterbusch & Associates, in a note to clients.
Another negative for oil bulls: U.S. government data showing a second consecutive weekly increase in stockpiles. Energy Information Administration figures showed inventories rose 1.6 million barrels last week, putting stockpiles 3% above their five-year average for this time of year and indicating that there is plenty of crude available.
Inventories were expected to have dropped 2.1 million barrels, according to the average target of 13 analysts and traders surveyed by The Wall Street Journal.
Elsewhere in commodities Wednesday, most-active gold futures advanced 0.9% to $1,527.80 a troy ounce on the Comex division of the New York Mercantile Exchange, closing at a fresh six-year high. Growth worries and falling bond yields have buoyed prices in recent weeks by making the metal, which offers no yield for holding it, more attractive to some investors.
Most-active copper futures slid 1.4% to $2.5920 a pound, like oil paring some of their 1.7% climb on Tuesday due to fears of softening global growth and weak demand.
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