Crude oil prices plunged close to 2 percent on Wednesday as fears of further monetary tightening by the Fed triggered worries about economic growth and the potential demand for crude oil. The negative sentiment drained the euphoria that followed the announcement of higher-than-expected GDP growth data from China, one of the biggest importers of oil.
The worries about monetary tightening lifted the Dollar Index (DXY), a measure of the Dollar's strength against a basket of 6 currencies, 0.45 percent overnight to 102.21.
Tighter inventory position in the U.S. also failed to provide support for crude oil prices. Data released by the American Petroleum Institute on Tuesday showed crude oil inventories in the U.S. falling by 2.675 million barrels in the week ended April 14, higher than market expectations of a 2.464 million decline. Inventories had fallen by 0.377 million barrels in the previous week.
Official data from the Energy Information Agency are due later in the day. Markets are expecting a 1.09 million draw in inventories versus an addition of 0.597 million in the previous week.
Brent Oil Futures for June settlement traded between $82.78 and $85.41. It is currently at $83.11, down 1.96 percent from the previous close.
West Texas Intermediate Crude Oil Futures for June settlement too traded tight, between a high of $81.24 and a low of $79.03. The current price of $80.90 represents a loss of 1.97 percent from the previous close.
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