Crude oil prices fell about 7% on Tuesday as both US and global benchmarks fell below $ 100 a barrel.
China’s economic outlook, dim by the blockade to contain the Covid-19 outbreak, appeared to be the main cause of the decline, with increasing signs of a global economic slowdown. China is one of the world’s leading oil importers and the second largest consumer after the United States.
In addition, while demand may be weakening, supply has endured tensions caused by western sanctions against Russia, which has found new markets for oil and petroleum products in China, India and South America.
Michael Lynch, president of analytics firm Strategic Energy and Economic Research, said: “China is a big part of that. They have been carrying oil demand for 10 years.”
At noon, the US benchmark West Texas Intermediate fell 7.8% to $ 96.01 a barrel and international standard Brent crude fell 6.9% to $ 99.76. Brent temporarily fell below $ 100 before rebounding last week. Oil prices exceeded $ 120 a barrel last winter after Russia invaded Ukraine.
Gasoline prices are also falling, but it takes drivers more than a week to benefit from the fall in oil prices. This is because oil goes through several stages of processing and marketing before it is sold in retail stores.
According to the AAA Motor Club, the national average of regular gasoline fell to $ 4.66 a gallon on Tuesday, nearly two cents below Monday’s price. Prices fell 14 cents last week and 35 cents last month, but are about $ 1.50 higher than they were a year ago.
