Oil prices have been falling over the previous two weeks, but recently, the decrease has accelerated. Oil prices have been falling over the previous two weeks, but recently, the decrease has accelerated. Oil prices dipped below $100 on Wednesday for the first time since late April as worries about a looming recession spread among traders. Oil was above $120 per barrel less than a month ago. Oil prices have been falling over the previous two weeks, but recently, the decrease has accelerated.
Apart from some indications that gasoline sales may be slowing in the United States, which is fueling the idea that the economy is weakening, energy experts said there had been no fundamental shift in the energy sector. The cost of metals and other commodities is also declining.
According to Louise Dickson, a senior analyst at Rystad Energy, an analytical research business, “if a recession materializes and inflation continues to push prices for nearly everything higher, oil consumption is very certain to collapse, taking prices with it.”
Experts’ predictions on the direction the oil price will go in the coming weeks and months are widely divided. Prices will ultimately be determined by the potential severity of any future recession and the level of demand that China will experience once the Covid epidemic has passed. The Russian conflict in Ukraine shows no signs of coming to an end anytime soon, and despite tighter Western sanctions, Russian oil shipments have stayed stronger than many observers had predicted. Next winter’s natural gas shortage in Europe will compel utilities to use more oil, which might reduce supply and push up crude prices.
Brent crude, the benchmark for all other oil prices, fell by about 3% on Wednesday to $99.61. West Texas Intermediate, the American benchmark, dropped 1% to $98.53 a barrel. Gas prices are also decreasing, but more slowly than oil prices since it sometimes takes a day or two for fuel costs to coincide with crude prices. Petroleum is distributed and refined several times before it gets to the gas station.
On Wednesday, the national average price of normal gasoline decreased by 2 cents to $4.78 per gallon, which is a 9-cent reduction over the previous week. Just over three weeks ago, the national average gas price reached $5 per gallon. On average, drivers are still paying $1.65 more a gallon than they did a year ago.
Even with increased gasoline shipments from the United States to Europe to make up for decreased Russian imports, refinery capacity is still barely enough. Experts caution that if a storm were to hit the Gulf of Mexico, refinery damage may cause petrol and diesel prices to skyrocket.
All year long, the performance of oil equities has been strong. On Wednesday, shares of Hess and Marathon Petroleum fell by more than 2%.
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