Oil prices in the United States are plummeting under $100 as recession worries mount; gas prices are expected to fall

Oil prices in the United States are plummeting under $100 as recession worries mount; gas prices are ...

Updated at 4:24 pm EST

Tuesday, global oil prices fell for the first time in several weeks as investors lowered their bets on oil and commodities demand amid growing signs of recession in the world's biggest economy.

Copper prices fell to their lowest level in more than nineteen months as a result of a so-called inversion of the U.S. Treasury bond yield curve, which occurs when 2-year note rates exceed 10-year rates.

According to a research from the San Francisco Federal Reserve, a sustained inverted yield curve has preceded all of the nine recessions the US economy has suffered since 1955, making it an extremely reliable indicator of financial markets sentiment.

The GDPNow growth prediction from the Atlanta Fed suggests that the economy is shrinking at a 2.2 percent pace as it enters the third quarter, following what is likely to be two consecutive months of decline between January and June.

In early afternoon trading Tuesday, WTI crude futures for August delivery, the most tightly-linked commodity to US gasoline prices, were marked $10.74 lower on the session at $99.67 per barrel, falling below the $100 mark for the first time since early May.

Brent crude contracts for September delivery, the global pricing benchmark, fell $10.59 to change hands at $102.97 per barrel.

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The drop in crude contrasts to a notable lack of emergency stockpiles, with recent data from the Energy Department showing that the US Strategic Petroleum Reserve is at its lowest level since April of 1986.

Crude production in the United States has begun to rise, reaching 12.1 million barrels per day last week, the highest level in over two years, as drillers try to capitalize on the rising prices and respond to President Joe Biden's desire to increase the flow of oil and gas products to American consumers.

The petroleum price rise may soon show up at the pump, as well, according to data from the AAA motor club. Over the holiday weekend, gasoline prices in the United States fell from a all-time high of $4.80 per gallon, the lowest level in more than a month prior to today's sell-off.

Although minor, the decline may indicate larger declines over the summer, as oil prices fall in the face of uncertain demand and a stronger US dollar, linked to the global economic slowdown.

"The price of wholesale gasoline has dropped, allowing consumers to enjoy the holiday weekend," according to GasBuddy's head of petroleum analysis. While prices may decline throughout this week, the drop may fade soon, particularly given the strong demand over the holidays. For the time being, Americans are spending roughly $100 million per day less on gasoline, and that's good news at a time when gasoline prices remain near records.

Due in part to the impact of a sanction on the sale of Russian crude and the persistent Iranian export prohibition, oil companies in the United States are likely to report record profits in the June quarter.

Exxon Mobil Corporation (XOM) - Get Exxon Mobil Corporation Reports said operating profits would likely increase $7.4 billion from the three months ending in March, when it reported profits of $8.8 billion. Exxon is expected to publish its formal second quarter earnings on July 30.

Exxon said the majority of the gains -- around $4.5 billion - will come from improved margins in the sale of gasoline and diesel, a fact that is likely to elicit further criticism from President Biden.

According to Refinitiv forecasts, the energy sector will generate record profits in the three months ended in June, with collective profits rising by 222.6% to $50.8 billion. Powered by a staggering 772 percent increase from the oil & gas refining and marketing sub-set

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