Crude oil suffered its worst trading session of the year, as losses mounted throughout the day amid a burst of pessimism over U.S.-China trade tensions that pushed investors away from risky assets.
July WTI crude settled 5.7% lower at a two-month low $57.91/bbl, while Brent crude sank 4.5% to close at $67.76/bbl; WTI settled below its 200-day moving average for the first time since early April.
"It seems like we’re going to be entrenched in a trade war, which is really going to hurt demand for crude oil," says Tariq Zahir, a commodity fund manager at Tyche Capital Advisors.
The trade concerns come as global crude supply has increased, reigniting worries over a potential glut; Energy Aspects analysts estimate global inventories rose by 50M-60M barrels from early April to mid-May as refiners have undergone maintenance and cut back on the amount of crude they process.
Oil and gas names drown in a sea of red: HES -7.9%, CLR -8.2%, DVN -7.3%, NBL -6.9%, NBR -17.4%, CRC -16.2%, ECA -7.4%, CPG -8.2%, RIG -6.2%, ESV -11.6%, DO -10.6%, NE -9.2%, CHK -5.9%, XEC -6.5%, CXO -6.4%, PE -7.7%, LPI -8.6%, MTDR -9.4%, XOG -8.8%.
Now read: Chesapeake Energy: I'll Buy Below $2 »
Subscribe for full text news in your inbox