Citi warns after oil price drops below $90: sharp decline expected to continue

Crude oil dropped below $90 a barrel for the first time this week since Russia invaded Ukraine - and one top strategist warned bigger price drops are on the horizon. The drop in oil speaks to weakening gasoline demand in the US as recession fears mount, coupled with larger builds in US inventories that has elevated supply.

Speaking Thursday, Ed Morse, global head of commodities research at Citi said: "It means the market is no longer expecting tightness ahead, it's expecting things to loosen up. It supplies purely playing against demand," he said.

More supply and less demand for oil typically means prices would fall. "This is something that needs to concern companies while it is something very pleasant for consumers," Morse said.

Crude oil prices have largely been easing over the past month as the Federal Reserve's aggressive monetary policy pushes investors to fret over the possibility of the US economy falling into a recession. Such concerns have dampened gasoline demand among American consumers at a time when US inventories and OPEC leaders reported increases on the supply side.