Cabot Oil and Gas workers at a hydraulic fracturing site in South Montrose, Pennsylvania

  • Oil futures sank on Thursday as dire economic data releases pointed to a demand recovery lasting longer than expected.
  • West Texas Intermediate crude fell as much as 6.3%, to $38.72 per barrel. Brent crude slid 5.4%, to $41.38, at intraday lows.
  • Thursday reports showed US GDP sliding the most on record and jobless claims notching a second-straight week of increases.
  • Vopak, the world's largest independent oil storage company, warned in a Wednesday earnings call the market's demand recovery will likely take at least the rest of 2020.
  • Watch Brent crude trade live here.

Oil futures plummeted on Thursday amid revived fears of a long-term demand shock.

West Texas Intermediate crude slid as much as 6.3%, to $38.72 per barrel. International standard Brent crude tumbled 5.4%, to $41.38, to its intraday low late on Thursday. Both reached their lowest point since late June.

The world's most-traded commodity stabilized near $40 per barrel through the summer after rallying in the second quarter. Thursday's session wiped out that support for WTI and threatened to plunge Brent futures below the key threshold. Oil volatility rocketed higher after touching its lowest point in five months.

Economic data released Thursday morning added to the oil market's worries. US gross domestic product fell at an annualised rate of 33% in the second quarter, confirming the coronavirus drove the biggest economic slump on record. Jobless claims for the week ended Saturday increased for the second week straight. The uptick arrives after months of steady declines and suggests the US labor market may stabilize at a historically high level of unemployment until the virus threat subsides.

Industry experts are also preparing for oil demand to stay weak. Vopak, the world's largest independent oil storage company, said in a Wednesday earnings call that it expects a slower demand recovery that lasts at least through 2020. CEO Eelco Hoekstra also warned that inventories were steadily increasing and threatening a storage crisis similar to the one that pushed prices below zero in April.

"If crude demand continues to show further signs of weakness, producers will have to look elsewhere for storage as Vopak's capacity is fully rented out. Another historic oil price collapse is unlikely but oversupply risks will definitely keep crude heavy," Edward Moya, senior market analyst at OANDA, said in a note.

Receive a daily update on your cellphone with all our latest news: click here.

Get the best of our site emailed to you daily: click here.

Also from Business Insider South Africa: