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Gasoline prices are set to fall if oil falls below the level of the invasion of Ukraine

Motorists may finally get some good news after oil prices fell below levels seen when Russia invaded Ukraine.

Brent was down 0.8% at $94.21 (£78) on Tuesday, while North American benchmark West Texas Intermediate was down 0.4% at $88.98 (£74) .

Drivers have faced record prices at the pump in recent weeks after the war in Ukraine raised concerns about global oil supplies and prompted Western governments to retaliate with sanctions against Russia, the world’s second-largest crude producer.

Oil prices have fallen by more than a third from their peak in March, but prices may take weeks to recover.

According to the latest RAC figures, petrol costs 173.5p per liter and diesel 184.2p.

The fall in prices is due to growing concerns that the global economy is heading for a significant slowdown or even a recession as growth in China and Europe weakens.

Data released by Beijing this week were worse than analysts had expected, while growth in Europe was weak across the board, with particularly troubling signals from Germany.

The central bank of China, the world’s biggest oil importer, cut interest rates to revive demand as data showed the economy unexpectedly slowed in July.

Manufacturing activity and consumer spending have been hit by Beijing’s lack of COVID-19 policies and the real estate crisis.

Factory output in the country’s industrial sector rose 3.8 percent in July from a year earlier, below analysts’ forecasts of 4.6 percent in a Reuters poll.

Retail sales rose 2.7 percent from a year earlier, again well below expectations, as China’s economic recovery from the pandemic showed signs of stalling earlier this year.

China’s economy narrowly avoided a slump in the second quarter, held back by a lockdown in commercial hub Shanghai and a deepening slump in the property market, as well as persistently lower consumer spending.

The country’s real estate sector, rocked by a mortgage boycott as thousands of homebuyers refuse to pay for unfinished apartments bought off-plan, also weakened in July.

Suzanne Streeter, senior analyst at Hargreaves Lansdown, said: “Anxieties are mounting over a worsening global growth outlook as economies around the world slow, pushing oil prices lower in anticipation of lower demand.

“Benchmark Brent crude fell below $94 a barrel, to levels last seen in February, amid concerns that recent weakness in China will persist and that rampant inflation will force consumers and companies elsewhere to cut spending.”

Gasoline prices are set to fall if oil falls below the level of the invasion of Ukraine

Source link Gasoline prices are set to fall if oil falls below the level of the invasion of Ukraine

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