Oil Prices Fall Below $90 First Since Ukraine Invasion on Recession Worries

By Yasin Ebrahim

Investing.com -- U.S. crude oil prices slipped below $90 a barrel Thursday for the first time since Russia invaded Ukraine amid ongoing concerns about demand on worries about a wobble in the global economy.

On the New York Mercantile Exchange crude futures fell about $2.12 to settle at $88.40 a barrel, while on London’s Intercontinental Exchange, Brent slipped $2.66 to settle at $94.12 a barrel.

The plunge in oil prices to the lowest level since February has been driven by ongoing concerns that slowing global growth will hurt oil demand, and data earlier this week showing a surprise rise in U.S. inventories.

The U.S. Energy Information Administration reported on Wednesday that crude oil inventories increased by 4.5 million barrels for the week to July 29, confounding expectations for a 629,000 decline.

Still, market participants point to the tight level of oil supply and the potential of an energy crisis in Europe that could helped keep losses in oil prices in check.

“There’s a supply issue…it’s not just demand,” Chief Strategist at Spouting Rock Asset Management Rhys Williams told Investing.com in an interview on Thursday.

“There’s not a lot of supply and not a lot of excess supply, so as you’re going into the winter months, that’s going to put a bid into oil, and certainly whatever happens in Ukraine could exacerbate that if indeed the Russians cut Europe off completely,” Rhys added.