Oil prices have plunged 6% this week, erasing the gains of recent months and easing fears about $5-per-gallon gas … at least for now. The price of U.S. crude oil slipped beneath $100 per barrel on Friday, dropping about 4% from Thursday, to settle at $98.49. That’s down from $104.87 on Monday. This takes the price of oil back down to where it was in early February, which was the last time that oil traded below $100 per barrel before it began its meteoric rise. The price of oil peaked in late February, when it exceeded $109 a barrel. Crude oil prices have dropped sharply today as fears of a global economic slowdown increased,” said CMC Markets analyst Michael Hewson. Disappointing US job creation numbers also sent Wall Street stocks falling in early trade Friday, confirming that the US economy has hit a weak patch in the past month.
The jobs report, though disappointing, “wasn’t catastrophic,” said Andy Lebow, senior vice president of energy futures at Jefferies Bache. But it came on the heels of downbeat economic data from both the U.S. and Europe and further erodes confidence in the broader economy.”The global economy has given indication for weeks that it’s slowing down,” he said. Earlier this week, Spain disclosed that it is officially in a recession, while a survey of economic activity in the euro zone in April found a faster contraction than previously thought. Meanwhile, Saudi Arabia, the world’s largest oil exporter, has increased production to 10 million barrels a day in recent months. And oil inventories in the U.S. continue to swell, rising 10% over the last 10 weeks amid weak demand for crude oil.