18.07.201915:23:00UTC+00Crude Oil Futures Settle Sharply Lower

Crude oil futures declined sharply on Thursday despite opening on a positive note, as resumption of service in the Gulf of Mexico region raised concerns about excess supply in the market.

Oil prices tumbled amid expectations of increased supply from Gulf of Mexico region after several facilities resumed service, having escaped largely unaffected by Hurricane Barry.

Worries about the outlook for energy demand due to slowing global economy and the likely impact of the ongoing U.S.-China trade dispute continued to weigh on the commodity.

West Texas Intermediate Crude oil futures for August ended down $1.48, or about 2.6%, at $55.30 a barrel.

On Wednesday, WTI Crude oil futures for August ended down $0.84, or about 1.5%, at $56.78 a barrel.

Several platforms across the Gulf of Mexico were evacuated last week and the resultant output cuts lifted crude oil prices. However, with production resuming from early this week after the storm crossed over, concerns about supply shortage have faded now.

Royal Dutch Shell reported on Wednesday that it resumed about 80% of its average daily production in the Gulf of Mexico region.

The official data from U.S. Energy Information Administration (EIA) on Wednesday showed a larger than expected drop in crude inventories in the U.S., but revealed a big jump in gasoline inventories.

Oil's fall this week is also due to reports about likely discussions between the U.S. and Iran on the nuclear missile issue.