The price of crude oil plummeted almost 9 percent to finish below $100 per barrel – the largest one-day percentage drop in more than two years – on growing worries about the U.S. economy.
On the week, oil prices have dropped more than 12 percent. Other commodities have also been falling.
Initial jobless claims jumped to an 8-month high this morning, raising concerns about tomorrow’s monthly nonfarm payroll report.
Oil was also pushed lower by a stronger dollar, which climbed today after the European Central Bank kept interest rates at record low levels.
Between mid-February and the end of April, the price of oil had surged 35 percent, sparking worries that such high prices would derail any economic recovery. Demand for gasoline fell along with the rising costs.
More and more people were saying that oil was just too high, said Michael Lynch, president of Strategic Energy & Economic Research, according to the Associated Press.
That got a lot of investors ready to run for the door. That's what they're doing now.
The impact of high fuel prices on the wider economy is the greater worry.
Gasoline has certainly put us at a tipping point, analyst and trader Stephen Schork told AP. The economy is in a precarious situation.
However, some traders believe the long-term bull run for commodities might not have been compromised.
The longer-term bull cycle is still in place, but this correction may have a life span of several months, as weaker economic data is fueling this correction to a large part, said Sterling Smith, senior analyst for Country Hedging Inc in Minnesota, according to media reports.