Crude oil futures sank on Thursday after revived production at a Libyan oil field sparked fears of an inventory flood.
West Texas Intermediate contracts slipped as much as 4% to $39.27. Brent crude, the commodity’s international standard, fell 3.1% to an intraday low of $41.93. Both contracts retraced some gains following the decline.
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“Oil seems ripe for a pullback here and if the demand outlook shows further signs of faltering, WTI could settle back towards the mid-$30s,” Edward Moya, senior market analyst at OANDA, said Thursday.
Futures have repeatedly faced pressure through the coronavirus pandemic from supply buildups. Oil demand remains at historic lows, and even a slight uptick in production threatens to flood the market with unwanted inventory. When such an oversupply occurred in April, WTI contracts tanked to negative prices and shocked global markets.
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WTI contracts for August delivery traded at $39.95 per barrel as of 12:10 p.m. ET Thursday. Brent futures traded at $42.63 per barrel.
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