Oil prices dropped suddenly yesterday for the first time in more than a year, signaling that the recent rally in energy prices may be coming to an end. August West Texas Intermediate crude, the U.S. benchmark, marked its sharpest daily decrease in about 13 months amid fears of flagging demand and renewed production from Libya.
The drop marked the worst percentage decline for oil futures since June of 2017. It was the steepest fall on a dollar basis in nearly three years, since September of 2015.
What made the losses more surprising is that the U.S. oil supply is also dropping, which could be expected to bolster prices. The Energy Information Administration reported yesterday that domestic crude supplies plunged by 12.6 million barrels for the week ended July 6.