The U.S. benchmark oil price tumbled below $80 a barrel on Friday for the first time since January as traders grew increasingly worried that much of the world was headed into a recession or was already in one.
The steady fall in prices from more than $120 a barrel a few months ago could easily reverse if the European Union severely limits its purchases of Russian oil as it has threatened to do. But for now, the falling oil price has offered consumers some relief from inflation.
Oil prices had been rising for the better part of the past 12 months, and accelerated sharply when Russia invaded Ukraine in February. The U.S. benchmark oil price, West Texas Intermediate, settled at $78.74 a barrel, down 5 percent, and the global benchmark, Brent, settled down 4 percent, to about $86.15.
The average price for a gallon of regular gasoline on Friday was $3.69, 20 cents lower than a month ago. The price would be lower if not for a fire this week at the BP refinery in Oregon, Ohio, which sent fuel prices in the Midwest higher.
Global supplies of oil are tight, but demand for the fuel has also been weak. Energy use in China, which has been a principal driver of oil price over the last two decades, is down sharply because the country’s government has frequently locked down big cities and regions to prevent the spread of the coronavirus. (New York Times)