The price of West Texas Intermediate crude tumbled by almost 10% on Tuesday, falling below $98 per barrel. Brent crude oil was down by more than 10%, to below $102 per barrel.
It’s the first time that WTI has been below $100 since May 11. That was also the last time Brent, which typically trades a bit higher, was below $102 a barrel. Brent got as a low as $101.10 a barrel in afternoon trading Tuesday before regaining some of that decline. But it was still below the $102 mark, down from Monday’s close of $113.50 a barrel. Brent has not been below $100 since April 25.
Wholesale gas futures fell as well, and were down 35 cents a gallon in midday trading, or 9% for the day.
The national average cost of a gallon of gas at the pump is now $4.80, according to the latest AAA reading, down one penny from Monday and 8 cents from a week ago. Gas prices hit a peak of $5.02 a gallon on June 14.
The rising fears about the chances of a recession is the primary driver of the latest sell-off in oil and gasoline futures, said Tom Kloza, global head of energy analysis for OPIS.
Until fairly recently, oil and gasoline investors had believed that there was little in the way of market forces to keep prices in check in the near term. “There is now a perceived huge downward risk tied to recession risk,” he said.
This story is developing and will be updated.