Oil Price Collapses by $100, Deepening Signs of Recession

The $100 mark collapsed as international oil price plummeted.

Even though the supply of crude oil is still not smooth, the price of oil has fallen because of the prospect that energy demand will decrease in the future.

A plunge in oil prices is also a warning sign of a recession.

US West Texas Intermediate (WTI) crude ended at $99.5 a barrel on the New York Mercantile Exchange yesterday.

It plummeted 8.2% in one day to below $100, the biggest decline since early March.

Just last month, it was predicted that the crude oil from West Texas would exceed $120 per barrel, and it was predicted that it would soon break through the $150 mark, but the situation changed within a month.

Supply insecurity due to the Ukraine war remains, but what has changed is fears of a recession that will reduce energy use.

[Matt Stucky/Senior Manager, Northwestern Mutual (8747WD)]

“There is clear evidence that demand is being disrupted. As wages fail to keep up with inflation, it is destroying demand as consumers prioritize buying necessities over options. The warning that ‘demand is destroying’ is that the breeches can’t afford to spend.”

• The world is paying attention to the US situation.
• In May, US consumer spending grew 0.2%.
• It fell faster than the previous month.
• It was less than half the forecast.
• Consumer spending, which accounts for two-thirds of US economic activity, is directly linked to the US economy.

Krystalina Georgieva/ IMF Managing Director

“I expect the US economy to slow down. We are aware that the road to avoid the US recession is getting narrower.”

Inflation is still at the highest level, but the disposable income of individuals has also decreased compared to the previous month and last year.

In addition, the already foretold and repeated rate hikes are putting pressure on economic players, sending deeper signals of a recession.