Crude oil prices tumbled on Tuesday on concerns about the outlook for energy demand amid fears of a potential recession in the U.S.
Data showing a contraction in Chinese manufacturing activity in April raised concerns about the outlook for oil demand. Worries about a U.S. debt default, and a drop in U.S. factory output weighed as well on oil prices.
Traders looked ahead to the Federal Reserve's monetary policy announcement, due on Wednesday. The Fed is widely expected to raise interest rates by 25 basis points. The accompanying statement and Fed Chair Jerome Powell's post meet press conference will be in focus for clues about the central bank's future policy moves.
West Texas Intermediate Crude oil futures for June ended lower by $4.00 or about 5.3% at $71.66 a barrel, the lowest close since March 24.
Brent crude futures were down $3.95 or about 5% at $75.36 a barrel a little while ago.
Treasury Secretary Janet Yellen said the U.S. government could run out of money within a month. The cost of insuring against a U.S. default hit fresh highs after Yellen said the government will be unlikely to meet all payment obligations by "early June."
Weekly oil reports from the American Petroleum Institute (API) and Energy Information Administration (EIA) are eyed. The API data is due later today, while EIA's report is due Wednesday morning.
