Oil crashes 16% to $94.52 per barrel, marking steepest single-day drop in 5 years

Following the U.S.-Iran ceasefire announcement, oil prices recorded their steepest single-day drop in more than five years.

The oil prices plunge 16% to below $100 per barrel while the Dow Jones Industrial Average surges 1,200 points.

West Texas Intermediate (WTI) crude oil fell $18.43 to settle at $94.53 per barrel, while Brent crude dropped $15.54, reaching the price tag of $93.73.

The stock market also experienced relief with the S&P 500 up 2.7% and the Nasdaq futures raising 3.4%.

The energy sector also followed a similar trend. However, Exxon Mobil fell 6%, and Chevron dropped to 4.6% as crude prices collapsed.

According to analysts, the price of gas is set to fall at the pump if prices drop at wholesale levels, but there still remains a huge backlog.

Although the ceasefire prevented President Trump from carrying out any threats to strike Iranian facilities, the two-week period provides only temporary relief. 

Iran has indicated the possibility of collecting transit fees between $1 million and $2 million for each tanker, which would increase oil prices by about $1 per barrel.