Oil prices continued to fall on Thursday as US oil futures fell below $90 a barrel for the first time since the war began in Ukraine as concerns about a slowing global economy spooked investors.
Just two months ago, oil prices exceeded $120 a barrel, pushing the national average price of gasoline to about $5 a gallon. However, rising oil production, easing demand and growing fears of a recession have driven prices down steadily.
Faisal A. Hersi, an energy analyst at Edward Jones, said: “The biggest driver of this decline is investors’ attention to the possibility of a recession and its impact on demand.” .
US benchmark West Texas Intermediate Oil fell to $89.50 on Thursday, down 27.6% from its March peak of around $124 a barrel. International benchmark Brent crude fell nearly 27% to $93.64 from its March high of $127.98 a barrel.
On Wednesday, a group of oil producers known as OPEC Plus agreed to increase production by 100,000 barrels per day in September. Crude stockpiles also rose by 4.5 million barrels, according to Energy Information Administration data released Wednesday, surprising analysts who had expected inventories to fall.
Supply restrictions and the war in Ukraine have pushed oil prices higher this year, straining countries facing an energy crisis. President Biden has accused energy companies of making unfair profits at the expense of American consumers. Demand for oil, which was high at the beginning of the summer, has eased.
Fears of a US recession are also fueling fears that oil demand will fall further, pushing prices down, Hersi said.
Hersi said the increase in oil reserves “could have had a small impact”.
