Oil prices dive $2 on fears of Asian pandemic, possible U.S. rate hikes | Reuters

Oil prices dive $2 on fears of Asian pandemic, possible U.S. rate hikes | Reuters

Oil prices dropped over $2 a barrel on Wednesday to their lowest in three weeks, on worries that surging COVID-19 cases in Asia would dent demand for crude and that U.S. inflation fears could prompt the Federal Reserve to slow economic growth with interest rate hikes.

Traders also cited rumors that the Iran nuclear talks were making progress, which could boost global crude supplies and depress prices. read more

Brent futures fell $2.05, or 3.0%, to settle at $66.66 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $2.13, or 3.3%, to settle at $63.36. Earlier in the day, WTI was down more than 5%.

That was the lowest close for both benchmarks since April 27.

On Tuesday, Brent rose to a 10-week high over $70 a barrel in intraday trade on optimism oil demand would surge with the reopening of U.S. and European economies. It retreated on fears of slowing fuel demand in Asia where surging COVID-19 cases prompted new restrictions in India, Taiwan, Vietnam and Thailand.