Why Oil Prices Plunge 10%

According to the oil price network reported on July 5, crude oil prices fell nearly 7% on Tuesday as fears of a recession intensified, a situation that could weaken oil demand
.

The collapse in oil prices came as Saudi Arabia announced an upward revision in August for all grades of crude oil in Asia
, its key market.
The Saudi price increase was largely in line with market expectations, due to strong refining margins and strong
market expectations.

But while Saudi Arabia raised the price of Arab light, the region's main crude in Asia, by $2.
80 a barrel in August, Brent and WTI crude prices fell
sharply.
Saudi Arabia determines the pricing trend of most oil exporters in the Middle East and is often seen as a bellwether
for oil market conditions.

At 12:37 EST, WTI crude oil futures fell $9.
01 per barrel to close at $99.
42 (-8.
31%), below the $100 mark per barrel
.
Brent crude futures fell $10.
41 a barrel to close at $103.
10 (-9.
17%)
.

Also on Tuesday, a Citigroup report hinted that if the global economy falls into recession and demand falls, oil prices could fall to $65 a barrel by the end of this year and $
45 a barrel by the end of next year.

According to Citi, "oil demand will only be negative in the worst recessions in the world, but in all recessions, oil prices will fall to roughly marginal costs.
"

However, Citi said in the same report that it does not expect the U.
S.
economy to fall into recession
.

JPMorgan Chase & Co.
warned over the weekend that in the worst case, oil prices could reach $
380 a barrel.