Crude oil closes below $100 per barrel for first time since May

Yahoo Finance Live anchors discuss crude oil closing below $100 per barrel for the first time since May.

Video transcript

BRIAN SOZZI: Here are few things you need to know right now. First, we are still watching oil prices closely, after Brad just mentioned, they plunged below $100 a barrel for the first time since May. Prices, you're seeing, have rebounded just a little bit. But Brad, it's interesting now to see Wall Street start to push back on this view that oil prices are-- have now started some form of protracted plunge.

Got to highlight some new commentary out of Goldman Sachs' oil analyst, Damian Carville, and friend of our show. Noting that while the odds of a recession or indeed rising, it is premature for the oil market to be succumbing to such concerns.

And Brad, this is, I think, the predominant view in the oil markets right now. Until we see demand destruction, until consumers say, you know what? I'm riding my bike to work instead of taking my SUV, and you see gas prices pull back accordingly, a larger move lower in oil prices and gas prices is unlikely.

BRAD SMITH: Perhaps a lot of investments in scooters that people might be making. But you know--

BRIAN SOZZI: That too.

BRAD SMITH: --at the same time, we spoke with Tamar Essner yesterday, and even throughout this year, she's been giving us some great insight and analysis on oil prices because it's not just oil prices. She reminds us continuously that our high natural prices for gas-- natural gas prices, energy prices, agricultural and food prices. So potentially more damaging if oil prices had sustained at some of those higher levels. Sure, a bit of reprieve here as of right now.

We'll hope that Brent and WTI remain in this $100 ballpark, if you will, and continue to tick lower. But that's a major question, especially considering how the supply chain crunch is going to continue to hit on consumers, at least on the product side, and so on the service side of filling up the tank of gas. And also seeing some of those fuel prices factored in to ticket prices when they purchase for, perhaps, some of that late summer travel, that's particularly going to come into play.

And that's where the demand destruction still remains intact, at least right now. And so that's what analysts are going to continue to really wade through to see where consumers, where their confidence, which has been waning, where that spending, which has been so focused on being able to fill up the tank of gas, where that starts to impact the economy more broadly and how companies also have to continue to pass on costs to them in this interim period of time.

BRIAN SOZZI: Yeah, it's be careful what you wish for, Brad, because if you do see sub-$90 a barrel of oil, a lot of pros think we might be in a recession. So be careful what you wish for there. And I don't find it surprising at all that yesterday you saw, really, the market had a challenging session for most of the day.

I know we saw that big reversal into the close, but still a challenging session on this oil price drop. And that Fed recession fear is in a perfect case, you get oil in that $100 to $110 a barrel range, that would perhaps signify we are past that first half soft patch in the economy. So again, lots to watch for here.

But we're also seeing pressure on shares of Chevron, Exxon, even a driller like Transocean, just not Occidental Petroleum, Brad. I know you've been flagging that stock recently in recent weeks. Of course, Warren Buffett buying more shares in that name earlier in the week.