By Barani Krishnan

Investing.com — Crude markets tumbled as much as $8 a barrel between Wednesday’s high and low, the second time in five sessions that they have tumbled so much, as the tax-waiver plan on President Joe Biden’s gasoline and other measures to suppress runaway fuel prices caught up with the bulls’ attempts to keep oil north of $120.

The benchmark for U.S. crude, trading in New York, settled down $3.33, or 3%, at $106.19 a barrel.

Crude traded in London, the global benchmark for oil, settled down $2.91, or 2.5%, at $111.74.

At the session low, WTI was at $101.58 against its high of $109.58. Brent was at $107.06 against the intraday peak of $116.25.

Oil bulls are trying to shake off the worst selloff in two months that sent WTI down 9% last week and Brent down 8% amid fears of a U.S. recession that could weigh on oil demand.

Wednesday’s volatility was fueled by uncertainty over government actions, including regulations, that could target refiners and oil producers, with fuel prices hovering just below record highs of $5 a gallon.

US Energy Secretary Jenifer Granholm is due to meet with representatives of the oil industry on Thursday to discuss ways to lower crude and fuel prices at the pump.

“Oil volatility will remain high now that opposing views are emerging on where prices will end the year,” said Ed Moya, analyst at online trading platform OANDA. “Oil prices are under pressure as global recession fears accelerate calls for crude demand destruction. short-term factors are turning negative for the crude demand outlook.

Moya noted that Citigroup’s head of commodities forecast Ed Morse called for $80 oil in the fourth quarter, even as Goldman Sachs’ Jeff Currie stuck to his projection of a so-called supercycle. crude prices.

On Wednesday, unleaded gasoline averaged $4.96 a gallon in the United States, down from a record high of $5.02 on June 13, according to the American Automobile Association. The federal government taxes gasoline at 18.3 cents per gallon and diesel fuel at 24.3 cents per gallon.

Biden said Wednesday he asked Congress to consider a three-month suspension of the 18.4-cent-per-gallon federal tax on gasoline and to call on states to suspend their fuel taxes. The president urged refiners to ensure that the full savings are passed on to the American people.

“Together, these actions could help lower the price at the pump by $1 a gallon or more,” Biden said in a White House announcement.

While lower pump prices could actually boost fuel demand and support crude prices, PVM analyst Stephen Brennock said in comments carried by Reuters that traders feared the administration could take further action. measures to cool high energy prices.

That could include closing a loophole, called Footnote 563 under the Commodity Futures Trading Commission, or CFTC, trading guidelines that was reported to the Biden administration, an investigative report by the Biden said last week. TYT network.

Footnote 563 primarily allows Wall Street’s largest financial firms to overwhelm sound pricing with massive volumes of commodity swaps — which are essentially bets on commodity prices.

Market participants were also on the lookout for weekly U.S. oil inventory data, expected after market settlement by API or the American Petroleum Institute.

The API will publish around 4:30 p.m. ET (20:30 GMT) a snapshot of the US Crude, Gasoline and Distillates closing balances for the week ended June 17. The numbers serve as a precursor to official inventory data on the same due Thursday from the US Energy Information Administration.

For the past week, analysts tracked by Investing.com expect the EIA to report a decline of 569,000 barrels, down from a 1.96 million barrel increase reported in the week to June 10.

On the front, the consensus is for a draw of 452,000 barrels from the previous week’s decline of 710,000 barrels.

With , we expect a rise of 328,000 barrels against a gain of 725,000 the previous week.