On Tuesday, oil prices fell by more than 3%. It hit its lowest level in six months. This comes amid growing concerns about an oversupply in the market and in light of new US economic data that signal weaker demand for the precious commodity in the coming months.
Brent oil hovered around the price of 73 US dollars per barrel. That’s the lowest level since June. US West Texas Intermediate (WTI) crude oil is below the $70 mark – specifically above $68.
Falling oil demand, lower fuel prices
It is unlikely that the American FED would be inclined to lower interest rates at the beginning of next year. However, higher interest rates will stifle economic activity, resulting in lower demand for oil.
Overall, the prevailing opinion on the market is that the growth of global oil demand is to slow down in 2024. The question is to what extent. Oil prices are pushed down not only by weak demand and pessimistic economic prospects, but also by concerns that agreements at the OPEC+ level will not lead to a significant reduction in production, or oil production.
From the point of view of motorists, of course, the chance to lower the price of gasoline or diesel is positive news – all the more so because it comes right before Christmas.
Source: Reuters / photo: cz.depositphotos.com