Oil slips below $90 to six-month lows amid demand concerns
The price of US oil fell 2.3 percent to $ 88.54 a barrel, the weakest settlement since February 2. The global benchmark Brent crude fell about 3 percent.
Robert Yuger, vice president of energy futures at Mizuho Securities, noted that the EIA’s weekly report showed a decline in refinery use, an increase in gasoline stocks, and a shrinking amount of gasoline supplied.
“I can’t stress enough that these three things are not supposed to happen in the summer,” Jauger said. “That means there’s a bad order situation out there.”
The EIA report notes that Americans are using less gasoline than they did last summer (when prices were low), but even during the summer of 2020 when Covid-19 was still restricting travel.
The EIA said the four-week moving average of gasoline supplies for the week ending July 29 was 8.6 million barrels per day, down about 9% from the same period in 2021 and slightly less than the same period in 2020.
Some people stopped driving as much when gasoline rose above $5 a gallon in mid-June.
Since then, the national average for regular gas has fallen 51 days in a row, falling to $4.14 a gallon on Thursday, according to the AAA. This is down 14 cents last week and 67 cents last month.
Oil prices have fallen 28% since their last closing high of $123.70 on March 8 in the wake of the Russian invasion of Ukraine.