Crude oil prices fell sharply on Wednesday, weighed down by concerns about the outlook for gasoline demand amid worries about economic slowdown, and reports saying Russia will likely lift its diesel ban sometime soon.
West Texas Intermediate Crude oil futures for November ended lower by $5.01 or about 5.6% at $84.22 a barrel.
Brent crude futures were down $4.82 or about 5.31% at $86.10 a barrel a little while ago.
Data released by U.S. Energy Information Administration (EIA) showed crude inventories in the U.S. fell by 2.224 million barrels last week, falling for a third straight week. Crude inventories were expected to see a modest increase of 0.05 million barrels.
The data showed gasoline stockpiles surged nearly 6.5 million barrels last week, substantially higher than an expected increase of about 200,000 barrels. Distillate stockpiles fell by 1.269 million barrels, as against expectations for a 0.068 million drop.
The Joint Ministerial Monitoring Committee online meeting of the Organization of the Petroleum Exporting Countries (OPEC) today kept the group's output policy unchanged.
"The current state of the oil market is that global economic pain is coming courtesy of surging bond yields. Crude demand destruction will occur this quarter, but this pullback in prices will be limited given the risks of further shocks to supplies and a reacceleration of the US economy," says Edward Moya, Senior Market Analyst at OANDA.
