Oil Prices Tumble 5%; Brent At 7-Month Low Beneath $90/Barrel

NEW YORK (Pakistan Point News / Sputnik - 08th September, 2022) Crude prices descended into a near freefall on Wednesday, sending global benchmark Brent below $90 per barrel the first time since February as a rampant Dollar, China's growing COVID lockdowns and the potential for outsized US rate hikes took their toll on oil.

Brent, the London-traded global benchmark for oil, settled down $4.83, or 5.3%, at $88 per barrel. It was the lowest settlement for Brent since January 18. The global crude benchmark has lost more than $50 since scaling $140 per barrel in March, on the back of the upheaval in oil supplies after the West's sanctions on Russia for its special operation in Ukraine.

New York-traded West Texas Intermediate, the benchmark for US crude, settled down $4.94, or 5.7%, at $81.94 per barrel. Like Brent, WTI has lost almost $50 too since March, when it hit around $130.

"The oil market is a blood bath as the crude demand outlook took a major hit after Chinese and US trade data showed global demand is sharply weakening," said Ed Moya, analyst at online trading platform OANDA. "It appears the risk of losing Russian energy supplies is no longer keeping oil prices supported and that has energy traders solely fixated on the demand side drivers."

This week's slump in oil came after the Group of Seven, or G7, countries announced a cap on the selling price for Russian oil. The G7 aims to deny Moscow its rightful revenue from energy exports to limit Russia's military campaign in Ukraine.

Russia's President Vladimir Putin said on Wednesday the Kremlin might withhold all forms of Russian energy exports from "unfriendly" countries.� "We will not supply anything at all if it is contrary to our interests, in this case economic (interests)," Putin told a conference in Russia's Far East. "No gas, no oil, no coal, no fuel oil, nothing."

Brent crude is expected to average $98 per barrel by the fourth quarter of this year, the US Energy Information Administration (EIA) said Wednesday in its forecast for the global oil benchmark.