HOUSTON — The global benchmark for oil fell below $100 a barrel on Wednesday for the first time since late April as fears of a looming recession spread among traders.
Oil prices, which topped $120 a barrel just a month ago, have fallen over the past two weeks, but the decline has accelerated in recent days.
Energy experts said there was no fundamental change in the energy market, apart from some signs that fuel sales could slow in the United States, fueling the perception that the economy slows down. Metals and other commodities are also falling in price.
“If a recession materializes and inflation continues to drive up the prices of almost anything, demand for oil is almost certain to fall, taking prices with it,” said Louise Dickson, senior analyst at Rystad Energy, a analytical research company.
There is a strong difference of opinion among experts on the evolution of the price of oil in the weeks and months to come. Prices will ultimately depend on the depth of any recession and the strength of Chinese demand as the country emerges from the Covid pandemic.
There are no signs that Russia’s war in Ukraine will end anytime soon, and despite tougher Western sanctions, Russian oil exports have remained stronger than many analysts had expected. If Europe runs out of natural gas next winter, utilities will be forced to burn more oil, which could cut supplies and raise crude prices.
The price of Brent, the world’s benchmark for oil, fell 3% on Wednesday to $99.61. West Texas Intermediate, the US benchmark, fell 1% to $98.53 a barrel.
Gasoline prices are also falling, but at a slower pace, as it normally takes a week or two for the price at the pump to fully reflect crude prices. Oil goes through several stages of processing and marketing before it reaches the service station.
The national average price for regular gasoline on Wednesday fell 2 cents to $4.78 a gallon, 9 cents lower than a week ago. Average gasoline prices topped $5 a gallon just over three weeks ago. Motorists are still paying $1.65 per gallon more on average than a year ago.
Refining capacity remains barely adequate, especially as the United States sends more fuel to Europe to compensate for cuts in Russian imports. If a hurricane were to hit the Gulf of Mexico, damage to refineries could drive up gasoline and diesel prices, experts warn.
Oil stocks, which have performed well all year, suddenly fall. Shares of Hess and Marathon Petroleum fell more than 2% on Wednesday.
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