WASHINGTON, D.C. (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange moved sharply lower in overnight trade, pulled down by a global retreat in equity markets amid concern of a protracted U.S.-China tariff war.
Shortly after 9 a.m. EDT, NYMEX July West Texas Intermediate futures were down $1.50 near $57.65 bbl, and ICE July Brent slid $1.45 to near $68.70 bbl. NYMEX June ULSD futures were down 3cts at $1.9625 gallon, and June RBOB futures lost 4.6cts to near $1.9110 gallon.
Oil futures posted steep losses Wednesday morning as investors around the world rushed to exit positions in the bond and equity markets, reflecting growing concern that global economic growth is slowing. U.S. stock-market indexes, including the Dow Jones Industrial Average and the S&P 500 Index, pivoted lower Wednesday morning while stocks in Europe and Asia are in retreat mode.
Markets were unnerved this week after U.S. President Donald Trump said the country is "not ready" to make a trade deal with China, pointing to a protracted trade war with the world's second largest economy. Bloomberg economists estimate global growth could take up to a $600 billion hit in the next two years if tariffs expanded to include all U.S.-China trade.
Domestically, market participants await weekly supply data on U.S. inventories due for release from the American Petroleum Institute later Wednesday, while official figures from U.S. Energy Information Administration are set to be published 10:30 a.m. EDT Thursday.
U.S. commercial crude stocks are expected to have fallen 1.4 million bbl in the week ended May 24, as refineries increase runs ahead of the summer driving season. In refined products, analysts anticipate U.S. gasoline inventories to have fallen 800,000 bbl last week, while distillate stocks moved lower by 225,000 bbl.
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