Oil prices tumbled Tuesday with the U.S. benchmark falling below $100 as recession fears grow, sparking fears that an economic slowdown will cut demand for petroleum products.
West Texas Intermediate crude, the U.S. oil benchmark, slid 8%, or $8.67, to trade at $99.76 per barrel. The contract last traded under $100 on May 11.
International benchmark Brent crude shed 7.7%, or $8.74, to trade at $104.76 per barrel Tuesday.
Both contracts posted losses in June, snapping six straight months of gains as recession fears cause Wall Street to reconsider the demand outlook.
Citi said Tuesday that Brent could fall to $65 by the end of this year should the economy tip into a recession.
“In a recession scenario with rising unemployment, household and corporate bankruptcies, commodities would chase a falling cost curve as costs deflate and margins turn negative to drive supply curtailments,” the firm wrote in a note to clients.
Citi has been one of the few oil bears at a time when other firms, such as Goldman Sachs, have called for oil to hit $140 or more.
Prices have been elevated since Russia invaded Ukraine, raising concerns about global shortages given the nation’s role as a key commodities supplier, especially to Europe.
WTI spiked to a high of $130.50 per barrel in March, while Brent came within striking distance of $140. It was each contract’s highest level since 2008.