Something very odd is taking place in the oil market: on one hand, when it comes to physical, buyers can’t seem to get enough: as we noted earlier Saudi prices for Asian buyers just hit a new record high, a clear indicator of relentless demand for physical oil no matter the price…

… and yet at the same time, oil prices have tumbled today amid continued fears that demand for oil, and especially gasoline, will collapse when the US, Europe and the UK slumps into a recession… or already has.

As our friends at ForexLive point out, the trigger behind today’s plunge in oil prices is gasoline demand, which as we noted yesterday, showed that for July, gasoline demand (on a trailing 4 week basis) slumped below 2020 levels.

Intuitively, ForexLive cautions, “that doesn’t make sense. Yes, gasoline prices are much higher than 2020 but the world was in the midst of a pandemic and far more people were working from home in the summer of 2020.”