Crude oil prices below $100 a barrel on fears of global recession
Oil prices fell below $100 a barrel in early Asian trade on Wednesday as US inventory data showed a buildup in crude and refined products amid rising fears of a global economic slowdown.
Brent crude futures fell 68 cents, or 0.7 per cent, to $98.81 a barrel. US West Texas Intermediate crude fell 72 cents, or 0.8 per cent, to $95.12, its lowest in three months.
Investors sold positions on oil on concerns that aggressive interest rate hikes to curb inflation would lead to an economic slowdown that would hit oil demand.
Prices fell over 7 per cent in the previous session amid volatile trading.
The renewed COVID-19 travel restrictions in China also had an impact on the market. Many cities in the world’s second-largest economy have adopted new restrictions, ranging from business shutdowns to widespread lockdowns, in an effort to curb new infections from the highly contagious subtype of the virus.
Meanwhile, US crude stocks rose nearly 4.8 million barrels for the week ended July 8, according to data from the American Petroleum Institute on Tuesday, citing data from the American Petroleum Institute. Gasoline inventories increased by 3 million barrels, while distillate stocks rose by about 3.3 million barrels.
On Tuesday, the dollar index, which tracks the currency against a basket of six counterparties, also climbed earlier in the day to 108.56, its highest level since October 2002.
Oil is typically priced in US dollars, so a strong greenback makes the commodity more expensive for holders of other currencies. Investors also see the dollar as a safe haven during market volatility.