Gallon of gasoline in San Antonio dives – San Antonio Express-News

The price of U.S. oil tumbled below $100 a barrel on Tuesday for the first time since May, offering drivers the promise of further relief from record-high gasoline prices.

But the reprieve carries with it the prospect of a recession and deeper economic pain.

The nearly $9 a barrel decline in the price of West Texas Intermediate to $99.50 comes as gasoline prices plummeted in San Antonio and across the country over the past week to their lowest levels in a month.

While still close to record highs, gasoline prices have fallen for three consecutive weeks, saving Americans an estimated $100 million from what they were spending when the national average peaked above $5 a gallon last month, according to fuel-price tracking service GasBuddy.

In San Antonio, gasoline plunged nearly 17 cents over the week to an average $4.31 a gallon Tuesday, 18 cents less than a month ago. At some local stations, gasoline was selling for less than $4 a gallon, according to GasBuddy, which reported a price as low as $3.69.

On ExpressNews.com: Expect more ups and downs for oil prices

Prices in San Antonio are still running $1.56 a gallon higher than a year ago. Nationally, gasoline prices fell 10 cents a gallon to an average $4.78, 7 cents less than a month ago, but $1.66 more than a year earlier.

Gasoline prices have moderated with oil prices, which fell 9 percent Tuesday in the worst trading day for crude in months. Traders are worried that a potential recession could cut demand.

On its own, the sharp decline in crude prices is likely welcome news for consumers, an energy analyst says.

“If it brings a little gas price relief along with it I think consumers will welcome this,” said Karr Ingham, a petroleum economist with the Texas Alliance of Energy Producers, an oil and gas trade group in Wichita Falls. “But they wouldn’t welcome a recession and it’s hard to imagine another reason these prices are taking this dip today.”

Meanwhile, drillers in the U.S. are ramping up oil production to replace Russian barrels lost after Moscow’s invasion of Ukraine, raising concerns that a recession could catch traders with a glut of crude. The European Union meanwhile continues to buy Russian oil, said Chris Lafakis, an energy economist at Moody’s Analytics. “That calls into question the pace at which Europe will decouple from Russia.”

In one outlook, Citigroup Inc. said crude could fall to $65 a barrel this year in the event of a recession.

Adding to oil market fears, Shanghai launched mass testing for COVID in nine districts after detecting cases the past two days, calling into question the demand recovery in one of the world’s largest oil-consuming countries if lockdowns resume.

All of this amounts to a hazy picture of the months ahead.

“It’s very hard to forecast right now; there’s a lot of chaos in the market,” said Tom McNulty, managing director of Chiron Financial, a Houston-based energy investment banking firm. “The market trading off is often a way of saying, I’m just going to play it safe.”

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