(Updates prices, market activity to settlement)
By Laila Kearney
NEW YORK, April 20 (Reuters) - Oil prices slid by about
$2 a barrel to their lowest level since late March on Thursday,
dragged lower by fears a possible recession could dent fuel
demand and after a rise in U.S. gasoline inventories.
Brent crude futures settled at $81.10 a barrel,
shedding $2.02, or 2.4%. West Texas Intermediate crude (WTI)
futures settled at $77.29 a barrel, losing $1.87, or
2.4%.
Both benchmarks fell 2% on Wednesday and are at their lowest
since just before a surprise OPEC+ production cut announcement.
"At the end of the day, one of the big reasons why we're
sliding is fear of recession," said Bob Yawger, executive
director of energy futures at Mizuho.
The number of Americans filing new claims for unemployment
benefits increased moderately last week, indicating the labor
market was slowing after a year of interest rate hikes by the
U.S. Federal Reserve, and fanning concerns about a slowdown in
fuel demand.
Gasoline inventories jumped unexpectedly last week by 1.3
million barrels to 223.5 million barrels, the U.S. Energy
Information Administration said in its report on Wednesday. Implied gasoline demand also fell 3.9% from year-ago levels
to 8.5 million barrels a day. U.S. crude stockpiles, meanwhile,
dropped by 4.6 million barrels, but analysts said that decline
could be short-lived.
"Although yesterday's EIA crude stock draw of more than 4.5
million barrels looked supportive, all of the reduction was
related to a spike in crude export activity that could easily be
reversed in next week's EIA," said Jim Ritterbusch of
consultancy Ritterbusch and Association.
Easing some concern about a rate hike-induced recession in
the world's largest oil consuming nation, economists polled by
Reuters expected the Fed to end its tightening with a final 25
basis point rate rise in May.
In Britain, persistent double-digit inflation has bolstered
expectations of a further Bank of England rate hike.
On the supply side, oil loading from Russia's western ports
in April is likely to rise to the highest since 2019, trading
and shipping sources said.
Pakistan has placed its first order for discounted Russian
crude under a new deal which could cover 100,000 barrels per
day, the country's petroleum minister said.
Also weighing on crude prices, equity markets, which often
move in tandem with oil prices, were down after disappointing
results from Tesla and other companies.
(Additional reporting by Shadia Nasralla in New York, Andrew
Hayley in Beijing and Katya Golubkova in Tokyo; Editing by
Alexander Smith, David Gregorio, Barbara Lewis and Jonathan
Oatis)
