2020.04.2819:15:00UTC+00Oil Futures Settle Weak Despite Sharp Rebound From Day's Lows

Crude oil prices plunged sharply in early trades Tuesday, and despite regaining most of the lost ground as the session progressed, settled notably lower again.

Concerns about outlook for global energy demand, excess supply in the global market and a lack of storage continued to weigh on the commodity.

Prices rebounded from lower levels following a report that a bomb exploded on an oil tanker in Syria.

West Texas Intermediate Crude oil futures for June ended down $0.44, or 3.4%, at $12.34 a barrel, after hitting a low of $10.07 early on in the day. The contract rose to $13.69 a barrel by mid-morning but failed to find support at those levels.

On Monday, WTI futures for June ended nearly 25% down.

Brent crude futures ended higher, gaining $0.47, or about 2.3%, at $20.46 a barrel.

As the virus pandemic continues to ravage global economies, it is highly unlikely that demand for oil will see any significant increase in the near to medium term.

On Monday, the United States Oil Fund LP said it would exit its position in the front-month June crude oil futures contract and may need to hold more cash to satisfy potential margin requirements.

Goldman Sachs warned last week that the market will test global storage capacity in the next 3-4 weeks.

Traders now await weekly oil reports from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA). The API's report is due later today, while EIA will release its inventory data Wednesday morning.