Oil prices tumbled in pre-market trading on Wednesday. Brent, the global oil price benchmark, was down nearly 4% to less than $40 a barrel; WTI, the U.S. benchmark, slumped 4.5% to under $38 a barrel. 

Tripping up the market was a combination of concerns. According to data from the American Petroleum Institute, oil inventory levels in the U.S. jumped by 4.6 million barrels over the past week. That was well ahead of analysts' expectations for a storage build of 1.2 million barrels.

The word oil with a red down arrow next to it.

Image source: Getty Images.

Fueling the increase in oil storage levels were rising supplies as U.S. oil companies brought more of their idled oil pumps back on line, and tepid demand because of the coronavirus outbreak. Meanwhile, global supplies will grow further in the coming weeks as Libya brings back 1 million barrels per day of production.

The other issue weighing on crude prices is the potential for less consumption in the coming months due to growing COVID-19 cases across the U.S. and Europe. Several European countries have discussed the possibility of imposing new lockdown measures to slow the spread, which would also affect travel and thus demand for oil. Meanwhile, oil consumption in the U.S. will likely decline over the winter months as the cold weather and COVID-19 restrict travel.

The prospect of even weaker oil market fundamentals is putting additional pressure on energy stocks. The SPDR Energy Select Sector ETF (NYSEMKT:XLE) followed crude prices and the broader market lower in pre-market trading as weaker oil pricing will impact the sector's earnings in the coming months.