Crude falls nearly 10% in two days; trades at US$100 a barrel

(Bloomberg) — Crude oil fell for a second session as runaway U.S. inflation fueled concerns it would force moves that would push the economy into recession.

West Texas Intermediate fell 3.2% to below $100 a barrel for the first time since late April. The dollar advanced amid concerns over tighter monetary policy, making commodity prices quoted in this currency less attractive. Meanwhile, French President Emmanuel Macron and Hungarian Prime Minister Viktor Orban discussed energy security as the European Union seeks to persuade Budapest to drop its opposition to proposed sanctions on Russian oil imports.

«Crude oil may have finally peaked,» said Fawad Razaqzada, Market Analyst at City Index and «I know it’s a brave move and shorting oil is playing with fire because of geopolitical risks.» However, the recent pullback should have spurred another round of buying, but so far it hasn’t, he added, which could indicate a new lower price range where crude finds resistance according to technical charts.

In recent weeks, the market has reeled with rising interest rates and China’s fight against covid-19 threatening demand. At the same time, Saudi Arabia’s oil minister warned that the entire energy market is running out of capacity, a concern that could drive prices higher. His counterpart from the United Arab Emirates added that without more global investment, OPEC+ will not be able to guarantee sufficient supplies when demand fully recovers from the pandemic.

Despite lower oil prices, US retail gasoline and diesel prices hit record highs just ahead of the country’s summer driving season. Meanwhile, US crude production growth appears to be slowing, prompting the Energy Information Administration to cut its forecast for domestic oil production to 11.9 million barrels per day this year, compared with an earlier estimate of 12.01 million, according to a monthly report.

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Oil Sheds Almost 10% in Two Days to Drop Below $100 a Barrel

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