Concerns over a slowdown swept through global commodity markets and US industry estimates that there were rising stockpiles that caused it to sink again.
Oil plummets below $100 as a result of the recession risk come to Forefront.
West Texas Intermediate fell below $97 a barrel, taking losses for the US benchmark to almost 11% this week. The market continues to show signs that crude supplies are tight at present due to concerns that a looming recession will erode energy consumption.
The US benchmark was above $130 a barrel in March because of the sudden retreat of oil, which has resulted in the world s most crucial commodity having given up most of the gains seen in the wake of Russia's invasion of Ukraine. Inflation pressures have prompted the Federal Reserve to tighten policy aggressively, which in turn has spurred expectations that a demand-sapping recession may lie ahead. Concerns over supply tightness have been overshadowed by the dynamic.
There isn't a lot of rational assessment going on -- it's panic selling, said Vandana Hari, founder of Vanda Insights in Singapore. The fears may not end but could be brushed aside when supply constraints are back to the fore. The market balance is tight. According to people familiar with the figures, the US crude stockpiles were expanded by about 3.8 million barrels last week, including a rise at the key storage hub in Cushing, Oklahoma. Later on Thursday, official data on holdings will be released.
Oil markets are in a backward pattern with near-term prices above longer-dated ones. The US and its allies have discussed trying to limit Russian oil prices between $40 and $60 a barrel, according to people familiar with the matter. Allies are looking at several ways to limit Russia's oil revenues while minimizing the impact on their own economies.
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