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Crude Oil Futures Settle Sharply Lower

Crude oil prices plunged sharply on Wednesday as the deepening U.S.-China trade crisis raised possibilities of a prolonged slowdown of the global economy and concerns about a likely drop in near term energy demand.

Also, data showing an increase of crude stockpiles in the U.S. after seven weeks of declines raised prospects of excess supply in the market.

West Texas Intermediate Crude oil futures for September ended down $2.54, or 4.7%, at $51.09 a barrel.

Brent crude futures fell to seven-month lows and were down by about 4.4% at $56.40 a barrel around mid afternoon.

Crude prices have been sliding despite OPEC-led output cuts and the U.S. sanctions on Iran and Venezuela, as fears of the impact of the ongoing trade war on global energy demand continue to weigh on the commodity.

Data released by the Energy Information Administration this morning showed crude inventories in the U.S. rose 2.39 million barrels in the week ended August 2. Markets were expecting a draw of 2.8 million barrels in the week.

The data also said gasoline inventories were up 4.4 million barrels last week, while distillate stockpiles increased by 1.53 million barrels, more than thrice the expected rise.

The American Petroleum Institute's report, that came out Tuesday evening, said U.S. crude inventories fell by 3.4 million barrels in the week ended August 2 to 439.6 million barrels.

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