CEG - Crude oil tumbles to two-month lows on recession worries strong dollar

Crude oil prices plunge alongside broader markets on Tuesday as worries over an economic slowdown dominate sentiment, and the U.S. dollar surged against other major currencies.

WTI crude oil ( CL1:COM ) for August delivery -7.3% to $100.51/bbl, and September Brent crude ( CO1:COM ) -8.2% to $104.24/bbl.

ETFs: ( NYSEARCA: XLE ), ( NYSEARCA: USO ), ( UCO ), ( SCO ), ( USL ), ( DBO ), ( USOI ), ( NRGU ), ( OILK ), ( OLEM )

Eleven of the day's 15 biggest decliners on the S&P 500 are energy related: ( NYSE: HAL ) -8.2% , ( APA ) -8% , ( CEG ) -7.9% , ( SLB ) -7.8% , ( HES ) -7.7% , ( EOG ) -7.4% , ( COP ) -7.4% , ( MRO ) -7.4% , ( DVN ) -7.2% , ( FANG ) -7.1% , ( EXC ) -6.6% .

"In the very near term, the Dow & S&P will have a major factor on crude direction as recession fears remain," BOK Financial's Dennis Kissler told Bloomberg, also citing concerns that fuel demand could "drop significantly now that the 4th of July holiday is behind us."

" Capital flooding into U.S. dollars , which has sent [the dollar] soaring... appears to be putting a headwind in front of commodity prices," Colin Cieszynski, chief market strategist at SIA Wealth Management, told MarketWatch.

But many analysts say the downside for crude should remain limited by tight supplies.

"While there are demand concerns given the gloomier macro outlook, the market is still expected to be tight for the remainder of the year," according to ING head of commodity strategy Warren Patterson. "OPEC+ producers have limited room to increase output significantly, and so are unable to provide much relief to the market."

Oil prices are tumbling even as oil and gas workers in Norway went on strike , which should be supportive of oil prices, suggesting that investors currently are far more worried about a global recession driving down demand than about potential short-term supply issues, Cieszynski said.

Meanwhile, European natural gas prices climb to four-month highs while U.S. prices tilt lower .

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