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Listen to this articleThe U.S. benchmark oil price fell to about $80 a barrel on Friday, and gasoline prices in some states are now close to $3 a gallon.
HOUSTON — Saudi Arabia is slashing oil exports. U.S. crude oil in storage is dropping. Members of the European Union will soon sharply reduce how much fuel they buy from Russia.
Those developments would normally send oil prices sharply higher. Yet oil prices have been sliding. The U.S. benchmark, West Texas Intermediate, fell to about $80 a barrel on Friday from more than $90 at the start of the month.
The global supply of oil appears to be falling, but many oil traders think that demand is heading down even faster. That’s because economic growth is slowing or turning negative in many countries, and use of oil and petroleum products usually plummets in recessions.
The drop in oil prices has helped bring down U.S. gasoline prices, which will be welcome news to many people hitting the road for the Thanksgiving holiday next week. The national average price for gas was $3.71 a gallon on Friday, according to AAA, down from $3.87 a month earlier.
Analysts say the immediate cause for the drop in oil and gas prices is a growing unease that China will not significantly loosen its Covid lockdown policies because infections are rising again. That is likely to keep a lid on the Chinese economy and its need for oil. In fact, shipping data suggests that the number of oil tankers delivering supplies to the country has been dropping in recent days.
China has had an outsize impact on oil prices over the last two decades because it has been the world’s fastest-growing large economy and because it imports most of the oil it uses.
