Oil prices extend losses on rise of U.S. gasoline stocks, recession risks

NEW YORK, May 3 (Xinhua) -- Crude oil futures prices witnessed a further deep drop on Wednesday due to the surprising increase of U.S. gasoline inventory last week and continuous concerns over recession prospects.

The West Texas Intermediate (WTI) for June delivery dived 3.06 U.S. dollars, or 4.27 percent, to settle at 68.60 U.S. dollars a barrel on the New York Mercantile Exchange. Brent crude for July delivery sank 2.99 U.S. dollars, or 3.97 percent, to settle at 72.33 U.S. dollars a barrel on the London ICE Futures Exchange.

Though U.S. commercial crude oil inventory decreased by 1.3 million barrels in the week ending April 28, gasoline inventories posted a surprising increase of 1.7 million barrels, according to data issued by the U.S. Energy Information Administration on Wednesday.

Meanwhile, concerns over possible economic recession continued to weigh on oil prices with WTI futures closing at the lowest level since March 21.

Crude oil markets have got absolutely crushed after the bottom has fallen out of any pretense of support, said Christopher Lewis, analyst with market information platform FX Empire.

With further plunge on Wednesday, it looks like the market is finally starting to price in just how bad the global recession could be, added Lewis.

The Federal Reserve ignored calls for a pause of rate hike and raised the federal funds rate by another 25 basis points on Wednesday afternoon, which didn't help stem oil prices from sliding.