By Barani Krishnan

Investing.com — U.S. crude oil prices fell below $100 per barrel for the second consecutive week. This was even true on Tuesday. 

And once again, oil bulls will likely be counting on weekly U.S. inventory data to restore the market’s upside.

Crude, the London-traded benchmark oil price, fell 3.3% to $102.46 per barrel after a low of $101.73. 

Brent was up 6% over the past two weeks as speculation grew that Europe might ban Russian oil from its markets. But Brent has lost 9% since then, citing concerns that aggressive Federal Reserve rate hikes could lead to a US recession. Inflation is growing at an unprecedented pace of 40 years.

Oil bears were focusing on U.S. crude on Tuesday.

New York-traded , or WTI, the benchmark for U.S. crude, settled Tuesday’s trade down $3.33, or 3.2%, at $99.76. 

WTI’s session low was $98.91, the lowest it has been since the April 26 bottom at $97.06 

In the two prior weeks of trading, the U.S. crude benchmark gained almost 8 % to fall almost 10% in this week’s opening two days.

Tuesday’s slump in crude prices came as the American Automobile Association reported the average price of gasoline across US pumps at a record high of $4.37 a gallon.

Federal Reserve officials were discussing the possibility of an increase in the Federal Reserve’s 75-basis rate at their June meeting. They had previously imposed increases of 50-bps to 25 bps during May and March, respectively. These will be the most significant U.S. rate increases in at least one generation, as the Fed attempts to stop prices from rising at an alarming pace since 1980s.

After the announcement by the Biden administration that unprecedented quantities of crude oil were being released from the US Strategic Petroleum Reserve (or SPR) in an attempt to ease the pressure on the world supply due to sanctions against Russia, gasoline prices dropped to $4.07 per gallon and $4.07 respectively in April.

As oil prices rose rapidly due to the coronavirus epidemic, and as supplies of crude oil began to tighten, Joe Biden ordered his first major SPR pullback in November. Over the past two months, the administration has taken 3 million barrels on the average out of the SPR every week to help meet domestic refiners’ demand for crude in a market seeing a surfeit in fuel consumption amid strong economic recovery from the two-year long coronavirus pandemic.

The administration’s biggest SPR releases commence from this month as it releases a total of 180 million barrels through July — roughly one million barrels per day over the next 180 days. According to the US Weekly Petroleum Status Report, SPR inventories were at 550 millions barrels for the week ending April 29. This was the lowest stockpiles of the reserve level since December 2001.

While WTI itself has dropped from 14-year highs of $130 to Tuesday’s lows of under $100, gasoline has held stubbornly above the $4 average, prompting Biden to accuse energy companies of price-gouging.

“There’s clearly a huge amount of worry about a recession in the markets at the minute as central banks continue to aggressively tighten against the backdrop of a slowing economy and a cost-of-living crisis,” said Craig Erlam, analyst at online trading platform OANDA. “There’s a lot of pressure on household budgets and it’s only going to intensify as the year progresses which will take its toll.”

But the unwillingness of global oil exporters alliance OPEC+ to turn the taps on more is keeping oil prices “very elevated”, Erlam noted, adding that it was “perhaps a sign that we should get used to these higher prices.”

Participants in the market were looking out Tuesday for U.S. weekly petroleum inventory data. This information is due following settlement by API (or the American Petroleum Institute).

At approximately 4:30PM ET (20:30 GMT), the API will publish a snapshot showing U.S. crude oil, gasoline and distillate closing balances for week ending May 6. These numbers are a prelude to the official inventory data from the U.S Energy Information Administration (USEIA) on Wednesday.

Investing.com’s analysts expect an EIA drop of 457,000 barrels last week, compared to the 1.3-million barrel increase recorded during week to April 29, according to Investing.com.

Surprisingly, there is consensus for an increase of 1.57 million barrels in draw. This would be on top of the 2.23 million-barrel decrease from the previous week.

With , the expectation is for a drop of 1.31 million barrels versus the prior week’s deficit of 2.34 million.