Global crude oil benchmark Brent crude tumbled $7 to below $100 a barrel on Tuesday on a strengthening dollar, demand-sapping COVID-19 curbs in top crude importer China, and rising fears of a global economic slowdown, reported Reuters.
The sharp drop followed a month of volatile trading in which investors have sold oil positions on worries that aggressive interest rate hikes to stem inflation will spur an economic downturn that will pull the rug out from oil demand, Reuters reported.
| Futures | Price per barrel | Price correction | Percentage change |
| Brent | $110.22/bbl | $ 6.87 | -6.4% |
| US West Texas Intermediate | $ 96.74/bbl | $ 7.36 | -7% |
Oil prices are facing extreme pressure "as a defensive posture continues with consumer sentiment still in a depressed mode along with a COVID re-surface in China," said Dennis Kissler, senior vice president for trading at BOK Financial.
The dollar index, which tracks the currency against a basket of six counterparts, earlier on Tuesday climbed to 108.56, its highest level since October 2002. Investors tend to view the dollar as a safe haven during market volatility.
Investors have been dumping petroleum-related derivatives at one of the fastest rates of the pandemic era as recession fears intensify. Hedge funds and other money managers sold the equivalent of 110 million barrels in the six most important petroleum-related futures and options contracts in the week to July 5.
With Reuters inputs
First Published: Jul 13, 2022 12:41 AM IST
