New York (CNN)The selloff in the oil market gathered momentum Thursday on growing concerns about weakening demand for gasoline.
US oil dropped 2.3% to $88.54 a barrel, the weakest settle since February 2. Brent crude, the world benchmark, fell around 3%.
A government report released Wednesday unnerved oil traders by revealing an unexpected build in both crude oil and gasoline stockpiles, suggesting demand is cooling off.
Robert Yawger, vice president of energy futures at Mizuho Securities, noted that the weekly Energy Information Administration report showed a decline in refinery usage, rising gasoline inventories and a shrinking amount of gasoline supplied.
"I can't stress enough those three things are not supposed to happen in summer," Yawger said. "It implies there is a bad demand situation out there."
The EIA report indicates that Americans are using less gasoline than they were during not just last summer (when prices were lower), but even during the summer of 2020 when Covid-19 was still restraining travel.
The four-week moving average of gasoline supplied for the week ending July 29 stood at 8.6 million barrels per day, down about 9% from the same period of 2021 and slightly below the same period of 2020. the EIA said.
Some people stopped driving as much when gasoline surged above $5 a gallon in mid-June.
Since then, the national average for regular gas has declined 51 days in a row, dropping to $4.14 a gallon on Thursday, according to AAA. That is down 14 cents in the past week and 67 cents in the past month.
Oil prices have tumbled by 28% since their recent closing high of $123.70 on March 8 in the wake of Russia's invasion of Ukraine.