Oil prices are heading towards their most significant decline in five years, potentially benefiting motorists.
The international standard, Brent crude, is poised for its seventh week of consecutive losses, putting pressure on fuel providers to reduce prices for consumers.
Currently trading around $75 per barrel, Brent experienced an 11% drop before Thursday’s trading session, despite the Opec+ alliance’s commitment to cut production to stabilize prices. In September, it was nearly $100.
Since the Opec+ meeting last week, crude prices have consistently fallen, with the group’s decision for deeper production cuts being met with scepticism.
Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman have jointly called for adherence to the proposed supply reductions to bolster prices.
Nonetheless, concerns about China’s demand and weak manufacturing data from Germany are overshadowing the effects of these supply cuts.
Ravindra Rao, head of commodity research at Kotak Securities, commented, “The outlook for oil demand is grim. China’s economic rebound is faltering, while manufacturing activity in the West remains in decline.”
