International oil prices are plunging due to signs of a global economic slowdown.
On the 11th (local time), the New York Mercantile Exchange (NYMEX) closed at $94.29 per barrel, down $3.97 (4.04 percent) from the previous trading day.
Brent crude oil, the benchmark for international oil prices, fell $4.30 (4.18%) from the previous trading day to $98.48 per barrel on the London ICE Futures Exchange.
The WTI hit its lowest level since February 25, and Brent crude has formed a price range of less than $100 for the first time since the 16th of last month.
CNN Business analyzed that the impact was reflected as China blocked Shanghai and other cities to prevent the spread of COVID-19.
This is because the blockade of the world’s second-largest oil-consuming country has prevented millions of people from driving or flying, leading to a decline in consumption.
It also affected the release of 240 million barrels of reserves, mainly in Western countries.
The U.S. government said it plans to release one million barrels of strategic oil a day over the next six months. Other countries will release 60 million barrels through the Paris-based International Energy Agency (IEA).
In a letter to investors, UBS strategist Giovanni Stounovo said: “The release of strategic reserves will ease the rise in oil prices in the coming months. Also, the tightening of the market will be eased due to self-imposed sanctions by Russian crude buyers,” he said.
However, UBS expected oil prices to fall to $10 a barrel due to the short-term outlook, but expected them to rebound to $115 a barrel by June.
