Crude oil futures plunged sharply on Wednesday after data from the Energy Information Administration (EIA) showed a jump in U.S. crude stockpiles for a second straight week.

Concerns over energy demand due to an escalation in U.S.-China trade tensions weighed as well on crude oil prices.

West Texas Intermediate Crude oil futures for July ended down $2.13, or about 4%, at $51.14 a barrel, the lowest settlement price since mid January, 2019.

Brent crude futures, at $60.00 a barrel, were down by about $2.35, or 3.7%, around mid afternoon.

On Tuesday, West Texas Intermediate Crude oil futures for July ended at $53.27 a barrel, little changed from Monday’s close.

U.S.-China trade tensions intensified after U.S. President Donald Trump said that he was holding up a trade deal with China and had no interest in moving ahead unless Beijing agrees to four or five “major points” which he did not specify.

According to weekly inventory data released by EIA this morning, crude stockpiles in the U.S. rose by 2.21 million barrels in the week to June 7, beating expectations for a sharp drop. A week earlier, crude stockpiles had increased by 6.77 million barrels.

The EIA report also showed gasoline inventories increased by 0.76 million barrels, slightly above forecast. Meanwhile, distillate stockpiles unexpectedly dropped by 1 million barrels.

Data released by the American Petroleum Institute on Tuesday evening said U.S. crude inventories rose by 4.9 million barrels in the week ended June 7 to 482.8 million barrels. That compared with analysts’ expectations for a decrease of 481,000 barrels.

Elsewhere, a measure of China’s factory gate inflation slowed in May on weak commodity demand, reinforcing worries about cooling growth in the world’s second largest economy.

The material has been provided by InstaForex Company – www.instaforex.com