Crude oil prices drifted lower on Wednesday despite data showing a drop in U.S. stockpiles as well as a decline in output last week.
Worries about a prolonged recession and a resultant weak outlook for energy demand weighed on the commodity.
West Texas Intermediate Crude oil futures for June ended down $0.49, or about 1.9%, at $25.29 a barrel, after having surged to a high of $26.45 earlier in the day.
Brent crude futures shed $0.79, or about 2.6%, at $29.19 a barrel.
Data released by the Energy Information Administration (EIA) this morning showed U.S. crude stockpiles declined by 745,000 barrels last week, as against expectations for a over 4 million-barrel rise.
The EIA data also showed stocks in the storage at Cushing, Oklahoma, fell by 3 million barrels last week.
The EIA expects global energy demand to drop by 8.1 million barrels per day this year to 92.6 million barrels per day. The previous forecast was for a drop of 5.2 million barrels per day.
The agency also expects crude output in the U.S. to drop by 540,000 barrels per day, higher than an earlier forecast for a 470,000 barrels per day drop.
American Petroleum Institute (API) released a report late Tuesday, showing U.S. crude supplies rose by 7.6 million barrels for the week ended May 8, compared with analysts’ expectations for a build of 4.1 million barrels.