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The price of WTI continued to slide on Thursday after Wednesday’s EIA report showed a slackening of gasoline demand and fears linger that a recession will cut into that demand further.
WTI prices dipped below $100 per barrel on Thursday, falling $3.28 per barrel (-3.28%) by 11 a.m. ET, to $96.60. Brent crude also continued to fall, reaching $104.20 at that time—a decrease of $2.73 (-2.55%) on the day. The WTI-Brent spread is now roughly $8 per barrel.
Finished motor gasoline demand rose last week to 8.521 million bpd for the week, according to the latest Energy Information Administration data, but was down from the four-week average of 8.729 million bpd, and down sharply from gasoline demand this time last year—9.449 million bpd.
Further pressuring crude oil prices is the worry that the U.S. Fed will continue to hike rates, triggering a recession that could further stymie demand, along with the return to the market of some Libyan oil production and an increase in Covid cases out of China.
Prior to the EIA report, published on Wednesday, WTI was trading above $104 per barrel.
But a persistent tight market with limited spare capacity continues to put a floor under falling prices, as well as tensions over Russia and a possible oil price cap being considered by the U.S. and EU. On Wednesday, Russian Deputy Prime Minister Alexander Novak told state television that Russia would refuse to sell oil at all if the price cap was set below production costs—meaning that Russia would not be interested in pumping crude oil at a loss. The United States is holding out hope that there will be an agreement reached on capping Russian oil prices by this December.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.