Oil plummeted by about $10 a barrel on concerns of a looming global recession curtailing demand, even with expected supply disruptions as oil and gas workers in Norway began to strike.
Global benchmark Brent crude was down $10.77, or 9.5%, at $102.73 a barrel by 11:43 a.m. EDT (1543 GMT). U.S. West Texas Intermediate (WTI) crude fell $9.30, or 8.6%, to $99.13 a barrel from Friday’s close. There was no WTI settlement on Monday because of a U.S. holiday.
“The market is getting tight, but still we’re getting creamed and the only way you can explain that away is fear of recession in every risk asset,” said Robert Yawger, director, energy futures at Mizuho, New York. “You’re feeling the pressure.”
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Oil futures sank along with equities, which often serve as demand indicator for crude, as investors fretted about the possibility of an economic downturn as central banks across the world take aggressive actions to limit inflation.
In the euro zone, data showed business growth across the bloc slowed further last month, with forward-looking indicators suggesting the region could slip into decline this quarter as the cost of living crisis keeps consumers wary.
In South Korea, inflation hit a near 24-year high in June, adding to concerns about slowing economic growth and oil demand.
