New York (CNN)Recession fears are slamming the oil market, with crude tumbling on Friday below $80 a barrel for the first time since January.
The good news is the selloff should drive prices at the gas pump down, easing crushing inflation that has been harming consumers. The bad news is the sharp drop in oil prices is yet more evidence that investors are increasingly worried about the direction of the economy.
Oil tumbled as much as 5.7% to $78.73 a barrel on Friday -- the lowest intraday level since January 11.
Dow tumbles 400 points and breaks below 30,000 as recession fears mount
Investors are concerned about the Federal Reserve's campaign to get inflation under control by delivering punishing interest rate hikes designed to slow down the US economy.
"They're purposely sending this economy towards recession," said Robert Yawger, vice president of energy futures at Mizuho Securities.
Markets are betting the Fed's rate hikes -- the latest one coming earlier this week -- will hurt energy demand by causing people to drive and fly less and businesses to consume less energy.
"Fed rate hikes are killing demand for everything, in particular energy," said Yawger.
Gasoline prices dropped for 98 days in a row until Wednesday when they inched higher. The national average for regular gasoline ticked up to $3.69 a gallon on Friday, according to AAA. That's well below the June 14 peak of $5.02 a gallon.
The tumble in the energy market is being fueled in part by the skyrocketing US dollar, which continues to surge against rival currencies as investors rush into safe havens. That strength tends to be a negative for oil -- which is priced in dollars -- because it erodes the purchasing power of foreign buyers.
"This is the market saying, 'If we are going into recession, we're going into the dollar and selling everything else.' Oil is getting caught up in this," said Michael Tran, commodity and digital intelligence strategist at RBC Capital Markets.
Oil prices have now plunged about 40% since briefly eclipsing $130 a barrel in March as investors bet the war on Ukraine would derail Russia's oil exports. Fears about the supply of oil from Russia have proven to be overdone as the country continues to send crude overseas.
The Biden administration's unprecedented release of emergency oil from the national stockpile has also contributed to the oil selloff.
"No doubt that helped. That's one reason we are no longer at $130," said Yawger.
作者：Matt Egan，文章來源CNN，版權歸原作者所有，如有侵權請聯繫本人刪除。
風險提示：本文所述僅代表作者個人觀點，不代表 Followme 的官方立場。Followme 不對內容的準確性、完整性或可靠性作出任何保證，對於基於該內容所採取的任何行為，不承擔任何責任，除非另有書面明確說明。
喜歡的話，讚賞支持一下
暫無評論，立馬搶沙發