Crude Oil Shows Another Steep Drop Amid Ongoing Demand Worries

(RTTNews) - After moving sharply lower over the two previous sessions, the price of crude oil showed another significant move to the downside during trading on Wednesday.

Crude for June delivery plunged $2.20 or 3.6 percent to $58.22 a barrel and has now plummeted by nearly $5 a barrel for the week so far.

For the month of April, crude for June delivery nosedived by 18 percent, marking the biggest monthly percentage decrease since November 2021.

The continued slump by crude oil futures came amid ongoing concerns about the outlook for demand after the Commerce Department released a report showing the U.S. economy unexpectedly shrank in the first three months of 2025.

The Commerce Department said real gross domestic product fell by 0.3 percent in the first quarter after surging by 2.4 percent in the fourth quarter of 2024. Economists had expected GDP to rise by 0.4 percent.

The unexpected dip by GDP primarily reflected an increase in imports, which are a subtraction in the calculation of GDP.

Earlier in the day, reports showed Chinese factory activity contracted at the fastest pace in 16 months in April, while Japanese factory activity shrank for the tenth consecutive month in April as manufacturers coped with uncertainties surrounding new U.S. tariffs.

A report from Reuters indicating Saudi Arabian officials are telling allies and industry experts the kingdom is unwilling to prop up the oil market with further supply cuts also weighed on prices.

Reuters said the possible shift in Saudi policy could suggest a move toward producing more and expanding its market share.

Meanwhile, traders largely shrugged off a report from the Energy Information Administration showing U.S. crude oil inventories fell by much more than expected last week.