Brent crude oil prices fell last week and today and are currently trading at US$83.38 a barrel, although gasoline prices at the pump are lagging.
Although there was no obvious trigger for the price plunge, some analysts have suggested it could be down to concerns over China, which appears unlikely to exit lockdown after a spike in Covid cases. .
Jens Naervig Pedersen, chief analyst at DankseBank, said the slide could “signal concerns about whether China, after all, won’t start easing lockdowns due to an increase in infections.”
Ipek Ozkardeskaya, senior analyst at SwissBank, added that “the near-term outlook is revised from neutral to slightly negative, with the next natural target for the bears being $76 a barrel.”
Saudi Arabia and other OPEC oil producers are reportedly discussing a production boost, The Wall Street Journal reported on Monday, citing group delegates.
An increase of up to 500,000 barrels per day is currently under discussion for the December 4 OPEC+ meeting, according to the report.
By comparison, today’s prices continue to be well above pre-pandemic levels, which had fallen as low as US$24.81 at the start of Covid in March 2020.
BP fell 2.6% and Shell 1.8%,
Despite the fall in crude oil prices, the cost at the pump has not fallen much.
Diesel prices fell by 1.75p to 188.12p per liter from November 11 to 18, while petrol prices fell by 1.51p to 163.7p.
Earlier this year, in June, petrol was 191.1 pence per liter and diesel 198.96 pence per litre.