New York (CNN Business)– US oil prices briefly tumbled below $100 a barrel on Monday, unwinding a significant chunk of the recent spike caused by Russia’s invasion of Ukraine.
Oil plunged more than 8%, touching a low of $99.76 a barrel. That means oil has lost almost roughly quarter of its value since touching a near 14-year high of $130.50 a barrel on March 6.
It’s the first time oil has traded below $100 since March 1.
“This is one hell of a correction,” said Tom Kloza, global head of energy analysis at the Oil Price Information Analysis.
The selloff should ease fears of an energy-driven recession in the United States and, if sustained, should bring some relief to drivers dealing with record gasoline prices.
Brent crude, the world benchmark, dropped more than 7% to $104.35 a barrel in recent trading. That marks a sharp pullback from the recent peak of nearly $140 a barrel.
Despite the recent selling, oil remains up by more than 30% on the year.
What this means for gas prices
Still, the tumble back to $100 should cool off prices at the pump, which move with a lag to oil.
If oil prices stay at current levels, the national average price for regular gasoline would likely dip by about 20 cents a gallon, Kloza said. That would mean gas prices are still high — and above $4 a gallon nationally — but below record highs.
Gas prices have already stopped going straight up, even before Monday’s sharp decline in oil. According to AAA, the national average stands at $4.33 a gallon on Monday. That’s unchanged from Friday, so things seem to be leveling out — albeit basically at record highs.
Unfortunately, any relief at the pump may not last long.
Kloza still expects gasoline prices to rise this spring and summer as demand recovers, with the national average climbing to around $4.50 a gallon.
“It’s just going to be a wild ride,” Kloza said.
Ryan Fitzmaurice, energy strategist at Rabobank, similarly believes oil prices have not yet set their highest levels of the current cycle.
“Ultimately, we’ll see new highs before all is said and done,” said Fitzmaurice. “Given how big and important Russia is, we will probably breach those all-time highs set in 2008.”