Prices for crude oil continue to decline and have now fallen below $100 U.S. per barrel.
West Texas Intermediate crude oil, the U.S. benchmark, fell $3.33 U.S. to settle at $99.76 U.S.
a barrel in New York trading. Brent crude oil, the international standard, declined $3.48 U.S. to
finish trading yesterday (May 10) at $102.46 U.S. per barrel.
The price of crude oil has now pulled back 10% in the last two days as fears grow that the
global economy could be pushed into a recession with central banks raising interest rates to
cool off inflation.
Also, the U.S. dollar continues to advance amid worries over tighter monetary policy, making
commodities priced in the currency less attractive. And the European Union is struggling to
persuade Budapest to drop its opposition to proposed sanctions on Russian oil imports.
The oil market has swayed in recent weeks as interest rates rise, and China’s fight against
COVID-19 threatens demand. At the same time, Saudi Arabia’s oil minister warned that the
entire energy market is running out of capacity, a concern that could potentially drive prices
even higher.
However, even as oil prices have dipped, retail gasoline and diesel prices continue to rally to
record levels ahead of the summer driving season.
Meanwhile, U.S. crude output growth appears to be slowing, leading the Energy Information
Administration to cut its forecast for domestic oil production to 11.9 million barrels a day this
year, compared with a previous estimate of 12.01 million.
