Crude oil futures ended deeply lower on Tuesday on weak demand outlook. The steep drop in crude oil prices reflected concerns that a slowdown or outright recession by the global economy will lead to reduced energy demand. Besides, concerns about the emergence of a new, more infectious Covid-19 strain in several parts of the world continue to weigh on investors' minds. Many cities in China are already taking steps to stop the spread of the new strain, leading to worries about another round of painful lockdowns, especially in Shanghai or Beijing. A Covid-19 resurgence and the resumption of Chinese lockdowns could put further pressure on a global economy that is already being squeezed by aggressive monetary policy tightening by the world's central banks.
Benchmark crude oil futures for August delivery fell $8.25 or 7.9 percent to settle at $95.84 a barrel on the New York Mercantile Exchange. Brent crude for September delivery dropped $7.61 or 7.1 percent to settle at $99.49 a barrel on London's Intercontinental Exchange.