All major commodities, along with stocks in major financial markets, tanked on July 5 across the world amid the growing fears of a global recession.
Global benchmark Brent crude was down $10.77, or 9.5 percent, at $102.73 a barrel by 11:43 a.m. EDT (1543 GMT). U.S. West Texas Intermediate (WTI) crude dropped below the $100-mark, as it fell by $9.30, or 8.6 percent, to $99.13 a barrel.
"The market is getting tight, but still we're getting creamed and the only way you can explain that away is fear of recession in every risk asset," said Robert Yawger, director, energy futures at Mizuho, New York. "You're feeling the pressure."
Oil futures sank along with equities, which often serve as demand indicator for crude, as investors fretted about the possibility of an economic downturn as central banks across the world take aggressive actions to limit inflation.
If a demand-crippling recession sets in, then crude may collapse to $65 per barrel by year-end, and as low as $45 by 2023-end, analysts at Citigroup said.
Stocks fell broadly
Markets around the globe faced the heat as the possibility of a recession looms large. The S&P 500 fell 1.8 percent as of 10:10 a.m. Eastern. More than 95 percent of stocks in the benchmark index fell in the weak opening following a long weekend for the Independence Day holiday. The Dow Jones Industrial Average fell 615 points, or 2 percent, to 30,515 and the Nasdaq fell 1.3 percent.
Small-company stocks also fell. The Russell 2000 shed 1.9 percent.
Energy companies had some of the biggest losses, with Exxon Mobil shedding 2.8%.
Banks also fell significantly, along with bond yields. The yield on the 10-year Treasury, which helps set mortgage rates, fell to 2.82 percent from 2.90 percent on July 1. JPMorgan Chase fell 2.4%.
European shares slide as well
European stocks slid 2.1 percent on Tuesday as soaring energy prices stoked inflation worries, sending the euro sinking on recession concerns, while German utility Uniper extended its tumble amid worries about its bailout.
The continent-wide STOXX 600 index marked its worst session in over two weeks. Losses were largely broad-based and led by oil and gas stocks and miners.
Uniper shares slumped 9.5 percent as Germany prepared for the possibility of taking a stake in the country's largest buyer of Russian gas, Handelsblatt reported.
"It comes at a highly fragile time geopolitically, given that the EU is facing the threat that Russia will turn off the taps abruptly, potential plunging vital industries into crisis," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
Gold down to lowest levels since Dec 2021
Gold suffered with the sharpest plunge in over six months, with the yellow metal sliding by 1.9 percent today to $1,774.26.
Among other precious metals, spot silver fell 0.6% to $19.84 per ounce, platinum slipped 1.9% to $868.87 and palladium edged 0.9% lower to $1,904.81.
"The near-term technicals for gold and silver are fully bearish, which is also inviting the technically based speculators to play the short sides of the futures markets," said Jim Wyckoff, senior analyst at Kitco Metals.
Natural gas falls over 6%
U.S. natural gas futures fell more than 6 percent on Tuesday as a slightly cooler shift to near-term weather forecasts added to headwinds from a prolonged shutdown of Freeport LNG's export plant.
Front-month gas futures for August delivery on the New York Mercantile Exchange (NYMEX) fell 20.6 cents, or 3.6 percent, to $5.524 per mmBtu at 11:33 a.m. EDT (1533 GMT), after falling over 6 percent earlier in the session.
Over the holiday weekend, "near-term weather forecasts have been revised significantly cooler, meaning gas-for-power demand will be less, relative to the expectations of last week," said John Abeln, an analyst with data provider Refinitiv.With Reuters & AP inputs