Why Oil Prices Crashed By 10% Today
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Crude oil prices fell by nearly 7% on Tuesday as fears of a recession mount—a scenario that could put a dent in oil demand. ![]()
The price of WTI crude oil slipped $9.01 per barrel by 12:37 pm ET below $100 per barrel to $99.42 (-8.31%), while Brent crude sank $10.41 per barrel to $103.10 (-9.17%). ![]()
Also on Tuesday, a Citi report suggested that
oil prices could fall to as low as $65 per barrel by the end of this year and as low as $45 by the end of next year if the world enters a recession and demand tanks.
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According to Citi, oil demand goes negative “only in the worst global recessions, but oil prices fall in all recessions to roughly the marginal cost.”
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In the same report, however, Citi said that it did not expect the U.S. economy to fall into a recession.
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On the complete opposite end of the spectrum, Russia’s former president Dmitry Medvedev suggested that capping the price of Russian oil at half its current level could cause oil prices to skyrocket
above $400 per barrel. ![]()
JP Morgan warned this weekend that
oil could reach $380 per barrel in a worst case scenario if Russia starts cutting crude oil production in retaliation for the sanctions.
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