Oil Prices Fall Sharply to $103 amid Global Recession Concerns

Oil prices fell sharply when settling trading on Tuesday, with concern about the global economic recession, which will negatively affect the demand for crude.

The price of futures contracts for Brent crude, the benchmark for September delivery, decreased by 7.9%, or $8.86, at $102.77 a barrel upon settlement.

The price of US NYMEX crude for August delivery also fell by 8.2%, or $8.93, to record $99.50 a barrel.

The decline in crude prices came in conjunction with warnings about the damage to oil demand in the event of an economic recession, in addition to the rise of the US dollar to its highest level in 20 years, which raises the cost of purchasing crude for holders of other currencies.

Citigroup warned of the collapse of oil prices to the level of $65 dollars a barrel by the end of this year, in the event of an economic recession that hinders demand, and crude may drop to $54 at the end of next year.

The launch of Chinese Shanghai, mass tests against the coronavirus in nine regions, after the discovery of cases recently, raised concern about the recovery of oil demand by one of the most oil-consuming countries in the world.

Bloomberg data showed that crude oil flows from Russian ports increased by 23% during the past week, but Russian shipments to Asia fell by 15% for the fourth week in a row.