Top Line

Oil prices fell to a ten-month low on Monday morning as Chinese officials highlighted the country’s increasingly worrisome Covid outbreak – highlighting the uncertainty looming over the global economy, but also raising hopes that gas prices will rise for the first time. Prices can fall below $3 per gallon. in 18 months.

Key Facts

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The price of West Texas Intermediate fell more than 5% on Monday to less than $75.50 a barrel – its lowest level since early January – while international benchmark Brent crude also fell 5% to about $82.50 a barrel.

In a morning note, Oanda analyst Ed Moya attributed the decline to the worsening COVID outbreak in China, where on Monday a deputy director of the Beijing Center for Disease Control and Prevention warning After China reported its first Covid deaths over the weekend since May, the city was facing its “most complex and serious prevention and control situation” of the epidemic.

“It looks like a zero-Covid policy isn’t going away anytime soon—and it certainly will have an impact on global growth,” says Moya. for oil from China and the US, where possibilities A rail strike “could be very troubling for the frail American economy.”

Following the decline, Patrick de Haan, head of petroleum analysis at GasBuddy, said that if the oil market stays at current levels, prices at the pump should fall “around the coast-to-coast heavy-travel Thanksgiving holiday” – potentially to national levels. But on average less than $3 around Christmas.

GasBuddy reported Monday that the country’s average gas price has fallen, falling nearly 12 cents from a week earlier to $3.64 a gallon, with oil prices plunging more than 18% this month.

important quotes

"What an incredible turnaround," says De Haan. "This week everyone will see relief at the pump, with even more fallout on the way."

main background

Rising energy prices pushed US inflation to its highest level in 40 years, but fears of a global recession have helped oil prices fall from 14-year highs. The price of Brent crude has fallen more than 30% since hitting a high of around $130 a barrel in March. Saudi Arabia and other major oil producing countries are further fueling Monday's decline Allegedly Discussion on agreement to boost oil production

amazing facts

Gas prices haven't fallen below an average of $3 per gallon nationwide since May 2021. The price at the pump reached a record high of more than $5 per gallon in June as oil prices soared earlier this year.

US gas prices fall for 10 days straight—close to $3 in the Southeast (Forbes)