Crude oil futures slump by more than 1% on weaker demand prospects

Singapore — 0230 GMT: Crude oil futures fell by more than 1% in mid-morning trade in Asia Thursday as prospects of weaker demand continues to grip energy markets.

At 10:30 am in Singapore (0230 GMT), April ICE Brent crude futures fell 81 cents/b (1.52%) from Wednesday's settle at $52.62/b, while the NYMEX April light sweet crude contract was 78 cents/b (1.6%) lower at $47.95/b.

The further spread of COVID-19 continues to dampen the demand outlook, with front-month Brent and WTI settling nearly 10% below their most recent highs on February 20. Both crude markers were last lower in early January 2019.

"With Brent crude oil prices, a fresh one-year low had been printed [Wednesday] given the state of concerns over global growth... looking to chart further downsides," IG's market strategist Pan Jingyi said Thursday.

The US Centers for Disease Control said Wednesday that for the first time since the outbreak of the coronavirus, the number of new cases outside of China has exceeded those inside China, according to media reports.

Nevertheless, some analysts said that supply-side constraints could limit the extent of declines.

"Supply-side issues also loom large, with Libyan output hitting 135,000 b/d, the lowest levels since 2011 and more than 1 million b/d lower than at the start of the year," ANZ analysts said Thursday.

The Energy Information Administration had also reported a smaller-than-expected build in US crude stocks.

US commercial crude stocks increased 460,000 barrels to 443.34 million barrels during the week ended February 21, according to EIA data published Wednesday.

Analysts surveyed by S&P Global Platts Monday indicated expectations of a 2.8 million-barrel increase.

US gasoline stocks fell to 256.39 million barrels last week, a 2.69 million-barrel decline from a week ago, while total distillate stocks dipped 2.12 million barrels to 138.47 million barrels, the EIA data showed.