Because supply was stronger and demand was weaker than many traders and analysts had expected, the U.S. benchmark oil price gradually fell from around $120 a barrel last summer to around $73 a barrel on Friday.
Prices briefly spiked last month after Saudi Arabia, Russia and other major oil producers announced that they would cut production by 1.1 million barrels a day, or slightly more than 1 percent of global supplies.
But that rally sputtered out, and oil prices have been falling in recent weeks. Many traders are increasingly concerned that the Federal Reserve’s interest rate increases, designed to bring down inflation, will slow the economy and might cause a recession. Central banks in Europe are also pursuing similar policies.
Fears of a recession have also grown in recent weeks because of the halting debt ceiling negotiations between President Biden and House Republicans. Elsewhere, signs that China and India, the world’s most populous countries, are not buying as much fuel as expected have also put a damper on oil prices, according to a report by the Eurasia Group, a research and consulting firm.
“Last year, you had higher growth in demand and lower growth in supply,” said Linda Giesecke, the head of demand analysis at ESAI Energy, a consulting firm. “This year, demand and supply are relatively evenly balanced.”
After nearly two years of contending with high inflation, many Americans appear to have changed how and where they buy gasoline and diesel, said Tom Kloza, the global head of energy analysis at Oil Price Information Service. Many people have started buying fuel at big-box retailers, which often offer lower prices than independent gas stations.
“The Costcos, the BJs, the Sam’s Clubs, the Buc-ees, the supermarkets, all took market share from 2020 to 2022, and they are not giving it up,” Mr. Kloza said. “It’s tougher for the little guy out there,” he added, referring to gas stations that use the brands of major oil companies like Exxon and Chevron but are typically owned by families or small businesses.