Crude oil prices drifted lower on Wednesday, amid prospects of a drop in crude demand due to weak global economic growth outlook.
With the International Monetary Fund lowering its forecast for global economic growth to 3.7%, from its earlier projection of 3.9%, and lowering Chinese economic growth 6.2% from 6.4%, for the current financial year, traders are betting on hopes crude oil demand will see a drop in the near term.
Escalating tensions between the U.S. and China too have raised concerns that global oil demand will decline in the near term.
Crude oil futures for November ended down $1.79, or 2.4%, at $73.17 a barrel. On Tuesday, crude oil futures ended up $0.67, or 0.9%, at $74.96 a barrel.
Crude oil prices eased despite reports that Hurricane Michael crashed into the Florida’s northwestern Panhandle coast today, flooding towns and ripping up trees with 155 mile per hour winds. Due to platform evacuations and shut downs ahead of the Hurricane Michael, it is reported that more than one-third of natural gas output from the offshore U.S. Gulf of Mexico wells has been lost.
The weekly oil report from the American Petroleum Institute is due later in the day. The data from the Energy Information Administration is due on Thursday.