WTI hits seven-month low on market selloff

A view of storage tanks and pipelines at the Shell Carson Distribution Complex, a distribution hub for petroleum products, in Carson, California, on March 11, 2022.

Bing Guan | Reuters

U.S. crude oil futures tumbled to a six-month low on Monday, as equity markets sold off on fears the economy might be teetering on the brink of a recession.

West Texas Intermediate has largely erased its gain for the year and Brent is now down for 2024, after trading higher for months on geopolitical risk in the Middle East and forecasts that the oil market would tighten in the third quarter.

Here are Monday’s energy prices:

  • West Texas Intermediate September contract: $71.92 per barrel, down $1.60, or 2.18%. Year to date, U.S. crude oil is now flat.
  • Brent October contract: $75.35 per barrel, down $1.46, or 1.9%. Year to date, the global benchmark has fallen 2%.
  • RBOB Gasoline September contract: $2.27 per gallon, down 4 cents, or 1.99%. Year to date, gasoline is up 8.03%.
  • Natural Gas September contract: $1.91 per thousand cubic feet, down 5 cents, or 2.95%. Year to date, gas is down 23.7%.

The sell-off comes after U.S. job growth disappointed in July, with the unemployment rising to 4.3%, the highest level since October 2021. The U.S. manufacturing sector also contracted in July for the fourth consecutive month.

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WTI vs. brent

The weak data in the U.S. comes as China’s economy had already been spooking traders.

OPEC+ is also expected to start increasing production in October, though the group indicated last week that this decision “could be paused or reversed, depending on prevailing market conditions.”

Geopolitical risk remains present, however, with Israel preparing for an attack from Iran after the assassination of Hamas leader Ismail Haniyeh in Tehran last week.

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