Oil Prices Drop Amid Worries About Global Economy

Brent crude hits lowest price since before Russia invaded Ukraine
By Newser Editors and Wire Services
Posted Aug 15, 2022 3:44 PM CDT
Oil Prices Drop Amid Worries About Global Economy
A screen displays market data at the New York Stock Exchange.   (AP Photo/Seth Wenig, File)

(Newser) – Oil prices dropped sharply Monday on worries about the global economy, but stocks recovered from early losses and ended higher on Wall Street., extending last week's gains. Investors remain focused on the economy and upcoming reports from retailers this week, the AP reports.The S&P 500 rose 16.99 points or 0.4% to 4,297.14. The Dow Jones Industrial Average rose 151.39 points, or 0.5% to 33,912.44. The Nasdaq gained 80.87 points, or 0.6% and closed at 13,128.05. Treasury yields fell as a report showed manufacturing in New York state unexpectedly contracted. The yield on the 10-year Treasury, which banks use to set mortgage rates, fell to 2.79% from 2.83% late Friday.

The market got off to a bumpy start as traders reacted to news overnight that China’s central bank cut a key interest rate, acknowledging more needed to be done to shore up its economy. The move is the latest warning for markets already on edge over record-high inflation and fears about recessions in the US and elsewhere. China is the world’s second-largest consumer of crude oil, so the news weighed on energy prices. US crude oil prices slumped 2.9% on worries about the global economy and weighed heavily on energy stocks. Chevron fell 1.9%. Brent crude, the international benchmark, dropped around 5% to below $94 Monday, the lowest since before Russia invaded Ukraine, the Guardian reports.

Investors are keeping a close watch on how inflation is affecting businesses and consumers. Spending has slowed and the broader economy has already contracted for two straight quarters. Several big retailers will give investors more detail on how their businesses are holding up when they report earnings this week. Home Depot and Walmart report their results on Tuesday and Target's results are due on Wednesday. Wall Street will get another look at the health of the retail sector and consumer spending when the Commerce Department releases its July retail sales report on Wednesday.

(Read more stock market stories.)

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