Oil Futures Settle Sharply Lower On Weak Economic Data

Crude oil futures settled lower on Thursday as worries about the energy demand outlook resurfaced after data showed a sharp contraction in U.S. GDP and an uptick in unemployment claims and amid a continued surge in coronavirus cases across the world.

West Texas Intermediate Crude oil futures for September ended lower by $1.35 or about 3.3% at $39.92 a barrel, settling below the $40 a barrel mark for the first time since early July.

Brent crude futures declined $0.81 to $42.94 a barrel.

In coronavirus updates, the three most populous U.S. states set one-day records for Covid-19 deaths on Wednesday, while Brazil, with the world's second-worst outbreak, set new daily records of confirmed cases and deaths.

In China, Covid-19 cases crossed the 100-mark for a second consecutive day, sparking fears of a second wave of the virus attack in the country. In India, the single-day increase of coronavirus cases crossed the 50,000-mark for the first time, pushing the country's Covid-19 caseload to 1,583,792.

In economic news, data from the Commerce Department showed real gross domestic product plummeted at an annual rate of 32.9% in the second quarter following a 5% slump in the first quarter. Economists had expected a 34.1% nosedive in GDP.

Consumer spending led the decrease, cratering by 34.6% in the second quarter, as the coronavirus-induced lockdowns in late March and April forced many consumers to stay at home.

A report from the Labor Department said initial jobless claims edged up to 1.434 million in the week ended July 25th, an increase of 12,000 from the previous week's revised level of 1,422,000. Economists had expected jobless claims to rise to 1.450 million from the 1.416 million originally reported for the previous week.

Elsewhere, data out of Europe showed Europe's biggest economy Germany shrunk by a record 10.1% in the second quarter, underscoring how fast the economic outlook has deteriorated.

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