Oil prices have fallen below $90 dollars per barrel on the world market, following fears of global economic recession.
This could cause a reduction in fuel prices at the pumps on September 16, 2020, if the trend continues.
Brent crude futures sold at $88 a barrel, falling below 90 dollars a barrel for the first time since February 8, 2022.
Analysts believe the slowing demand for the commodity in Europe, cut in production by the Organisation of the Petroleum Exporting Countries (OPEC), coupled with interest rate hikes by Central Banks are some of the major factors influencing the fall in oil prices. A stronger dollar also reduces the demand for the commodity.
Many also think the price of crude oil will hover around $80 for the rest of the year.
A variety of factors are “keeping a lid on prices,” says Vital Knowledge founder Adam Crisafulli, who pointed out to Forbes that Europe is moving aggressively to cut reliance on Russian gas and to find alternative energy suppliers such as Norway.
“The oil market is a bloodbath” as crude prices take a major hit from “sharply weakening” global demand, describes Edward Moya, senior market analyst at Oanda also said.
“It appears the risk of losing Russian energy supplies is no longer keeping oil prices supported,” he stressed, adding, “Global growth isn’t looking good at all and that is trouble for crude prices.”
Energy Analyst Dr Yusif Suleimana also told Joy Business the failure of OPEC to increase the supply of crude oil will affect the pricing of the commodity, forecasting a price of about $90 per barrel for the rest of the year.
“If you observe global oil consumption it has gone up drastically, almost 100 million is the global oil consumption within a day.
But the present challenges are going to have an impact on the cost. Assuming OPEC has announced that it is going to release some more barrels into the market then sentimentally it is going to raise some hope in the market”.
Global energy demand is softening, especially in China, where crude oil imports fell 9.4% last month compared to a year ago, as the country’s zero-Covid policy has led to full or partial lockdowns in more than 70 cities since late August.
Fuel prices went up between 5% and 10% at the various pumps beginning September 1, 2022.
This added about 60 pesewas to the current prices.
Presently, a litre of petrol is going for about ¢11.25 pesewas on average and diesel ¢14.00 on average.