Oil Tumbles As Recession Fears Spur Worries Of Demand Destruction

• Oil plummeted by nearly $12 a barrel on July 5, 2022, the biggest daily drop since March, and the decline spread to other energy sectors amid worries of a global recession. Benchmark Brent crude was down $11.88, or 10.4%, at $101.83 a barrel by 1:53 p.m. EDT. U.S. West Texas Intermediate (WTI) crude settled at $99.50 a barrel, falling 8.2%, or $8.93 a barrel. 
• Both benchmarks logged their biggest daily percentage decline since March 9 and hit share prices of major oil and gas companies. Prices hit the lowest since late April. 
• "We're getting creamed and the only way you can explain that away is fear of recession," said Robert Yawger, director of energy futures at Mizuho. Oil futures sank along with natural gas, gasoline, and equities which often serve as demand indicators for crude. 
• If a recession does hit and takes a significant bite out of energy demand, more wild swings to the downside could be in store. 
• Meanwhile, safe-haven demand for U.S. Treasuries boosted the dollar by about 1.3%, which in turn weighed on greenback-denominated oil as it becomes more expensive for buyers holding other currencies.

(Source: Reuters)