On Wednesday, crude oil prices traded lower ahead of expected builds in US crude inventories as product demand weakens. US West Texas Intermediate futures plummeted 1.81% to $98.88 per barrel. At the same time, Brent crude contracts slumped 1.62% to $105.61.
Both of the benchmarks have struggled for meaningful direction in recent days as trading volumes have thinned out. Meanwhile, summer is on track in the Northern Hemisphere.
The blackish liquid whipsawed this month, caught in a tug-of-war between supply and demand fears.
On Tuesday, American Petroleum Institute reported that crude stocks increased by about 1.90 million barrels for the week ended on July 15. Correspondingly, the figure came in higher than the average market estimate rise of 1.40 million barrels.
Investors now await the release of the official weekly crude and fuel inventory data from the US Energy Information Administration. The EIA will release the report at 1530 GMT on Wednesday, with traders watching out for implied demand.
Consequently, the latest US 3:2:1 and gasoline crack spreads declined to their lowest since April on Tuesday. The indicators are measures of refining profit margins, indicating weaker crude demand.
Subsequently, the market remained under pressure on indications from central bankers that they would raise interest rates to combat inflation.
Crude prices could fall below $100 in 2023
Meanwhile, economists cited that crude oil prices could plummet below $100.00 in 2023 if a recession hits countries. The prospects of an economic downturn hamper the outlook for blackish liquid.
Moreover, a report cited that a mild recession in advanced economies could bring WTI prices to $70.00 or even lower.
By 2023, the Energy Information Administration anticipated nearly $100.00 per barrel. This projection is with the assumption that global growth will be at 3.40%. Still, mounting recession fears, risk aversion, and a soaring U.S. dollar fired a significant blow to the crude market.