Oil prices dive on renewed concern over demand

Crude oil futures prices dropped over 2 percent on Tuesday as concern over recession and demand returned to the market.

The West Texas Intermediate (WTI) for June delivery fell 1.69 U.S. dollars, or 2.15 percent, to settle at 77.07 dollars a barrel on the New York Mercantile Exchange. Brent crude for June delivery sank 1.96 dollars, or 2.37 percent, to settle at 80.77 dollars a barrel on the London ICE Futures Exchange.

Concerns over the banking sector and rising interest rates weighed on stock market and energy prices on Tuesday with the U.S. dollar registering solid growth.

Oil prices slumped as the dollar rallied and crude demand signals remained mostly bearish as oil service supplier Halliburton signaled that customers are clearly motivated to produce more oil and gas, said Edward Moya, senior market analyst at OANDA, a supplier of online multi-asset trading services.

The U.S. consumer confidence index dipped to 101.3 in April from 104 in March, according to data issued by The Conference Board on Tuesday morning.

“While consumers’ relatively favorable assessment of the current business environment improved somewhat in April, their expectations fell and remain below the level which often signals a recession looming in the short-term,” said Ataman Ozyildirim, senior director of economics at The Conference Board.

WTI oil pulled back towards the level of 77 dollars a barrel as demand for riskier assets declined amid recession worries, noted Vladimir Zernov, analyst with market information supplier FX Empire. ■

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