HOUSTON — The global benchmark for oil dropped below $100 a barrel on Wednesday for the first time since late April as fears of a looming recession spread among traders.
Oil prices, which rose to above $120 a barrel only a month ago, have been slipping over the last two weeks, but the drop has accelerated in recent days.
Energy experts said there was no fundamental change in the energy market, apart from some signs that fuel sales may be slowing in the United States, which is feeding the perception that the economy is slowing. Metals and other commodities are also dropping in price.
“If a recession materializes and inflation continues to push prices for almost everything higher, oil demand is almost certain to fall, bringing prices with it,” said Louise Dickson, a senior analyst at Rystad Energy, an analytical research firm.
There is a sharp divergence of opinion among experts about where the oil price will go in the weeks and months ahead. Prices will ultimately depend on how deep an eventual recession might be and how strong Chinese demand will become as the country emerges from the Covid pandemic.
There is no sign that the Russian war in Ukraine will end anytime soon, and despite tightening Western sanctions, Russian oil exports have remained more robust than many analysts had anticipated. If Europe runs short of natural gas next winter, utilities will be forced to burn more oil, which could crimp supplies and raise crude prices.
The price of Brent crude, the global oil benchmark, slid on Wednesday by 3 percent to $99.61. West Texas Intermediate, the American benchmark, dropped 1 percent to $98.53 a barrel.
Gasoline prices are also declining but at a slower pace because it normally takes a week or two for the price at the pump to fully account for crude prices. Petroleum goes through several stages of processing and marketing before reaching the gas station.
The national average price for regular gasoline on Wednesday dropped 2 cents to $4.78 a gallon, 9 cents lower than a week ago. Average gas prices topped $5 a gallon just over three weeks ago. Motorists are still paying $1.65 a gallon more on average than a year ago.
Refinery capacity remains barely sufficient, especially with the United States sending more fuel to Europe to compensate for reductions in Russian imports. If a hurricane were to strike the Gulf of Mexico, damage to refineries could send gas and diesel prices soaring, experts warn.
Oil stocks, which have performed well all year, are suddenly falling. Shares of Hess and Marathon Petroleum dropped by more than 2 percent Wednesday.