Oil tumbles greater than 8%, breaks beneath $100 as recession fears mount

Oil costs tumbled Tuesday with the U.S. benchmark falling beneath $100 as recession fears develop, sparking fears that an financial slowdown will lower call for for petroleum merchandise.

West Texas Intermediate crude, the U.S. oil benchmark, slid 8%, or $8.67, to industry at $99.76 in step with barrel. The contract closing traded below $100 on Would possibly 11.

Global benchmark Brent crude shed 7.7%, or $8.74, to industry at $104.76 in step with barrel Tuesday.

Each contracts posted losses in June, snapping six directly months of positive factors as recession fears purpose Wall Boulevard to rethink the call for outlook.

Citi mentioned Tuesday that Brent may just fall to $65 via the tip of this yr must the economic system tip right into a recession.

“In a recession state of affairs with emerging unemployment, family and company bankruptcies, commodities would chase a falling value curve as prices deflate and margins flip unfavorable to force provide curtailments,” the company wrote in a observe to purchasers.

Citi has been one of the most few oil bears at a time when different companies, comparable to Goldman Sachs, have referred to as for oil to hit $140 or extra.

Costs had been increased since Russia invaded Ukraine, elevating issues about world shortages given the country’s position as a key commodities provider, particularly to Europe.

WTI spiked to a prime of $130.50 in step with barrel in March, whilst Brent got here inside placing distance of $140. It was once each and every contract’s easiest stage since 2008.