LONDON: World oil prices spiralled lower on Wednesday on fears that a potential recession will slash demand, with Brent crude sinking under $100 per barrel for the first time since April 25th as recession fears fueled a broader selloff.
Europe's benchmark crude contract, Brent North Sea, dropped 3.3 percent to $99.39 per barrel in mid-afternoon deals, while US counterpart WTI oil also fell 3.3 percent to stand at $96.12. Prices had already tumbled on Tuesday on concern that a slowing global economy will dent demand for petroleum products, with WTI breaching the key $100 level.
Citi analysts have forecast that Brent could strike $65 later this year in the event of a prolonged worldwide economic downturn.Goldman Sachs on Wednesday said that the oil sell-off has been driven by growing recession fears.Oil prices have also been knocked by a resurgent dollar, which is holding at a 20-year high against the euro and multi-month peaks against other major currencies.