On August 4, a significant decline was recorded in the oil prices. The prices for oil have dipped to their lowest level since before the Ukraine-Russia war conflict.
Possible Recession to Impact Oil Prices
The economists have been indicating a possible recession in the upcoming days. The future markets indicate that in the future, the recession would become fierce.
As the recession grows and the inflation rates hike, the demand for oil may dampen. This would cause the oil prices to go down.
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Future Price of Oil
The US oil benchmark WTI has moved in a downward direction. The price of oil has fallen below $90 per barrel. This is the first time since the Ukraine-Russia war began in February, that oil prices have fallen to such a level.
Prior to the conflict, the price of WTI Crude was $88. On the other hand, the price of Brent Crude is $95 per barrel. A $0.05 decline has been recorded in the futures market for gasoline.
Outlook for Crude Oil Prices
According to economists, it is very difficult and close to impossible to predict the crude oil prices outlook.
It is expected that a widening may be recorded between the Brent and WTI. It is mainly due to the Russia-Ukraine conflict that the gap is expected to widen between Brent and WTI.
The gap may continue widening until the conflict between Russia-Ukraine is resolved for good.
Prices of Retail Gasoline may Continue Falling
The prices of gasoline are constantly falling and they have continued falling for the 49th consecutive day. Since mid-June, gasoline prices have dipped by $4.11 per gallon.
According to data, the national average oil prices are expected to dip to $3.99 per gallon. The oil prices are expected to dive to the particular price in less than a week.
Impact of Reduction in Oil Prices
Due to the decline in oil prices, the consumers are going to receive a huge relaxation. This is because consumers have been hit hard by the constant rise in the costs of household staples.
These staples include costs such as food, housing, and energy. With the reduction in the oil prices, the consumers will find a bit of relief.
As of now 20 states in the United States and over 85,000 gas stations located in these states have already started selling gasoline at $3.99 per gallon.
It is predicted that two states, Delaware and North Dakota may also reduce the gasoline prices, bringing them below $4 per gallon. As for the next, the oil prices may drop to $2.99.
As a result of the predicted declines, it is a high possibility that the share prices for petrol-based companies may dip.
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