Petrol prices set to fall as oil drops back below Ukraine invasion level

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When Russia invaded Ukraine, oil prices fell below that level, after which motorists may finally have some good news.

Brent crude fell 0.8 per cent to $94.21 (£78) on Tuesday, while the North American benchmark price, West Texas Intermediate, fell 0.4 per cent to $88.98 (£74).

Drivers have faced record prices at pumps in recent weeks as fears about global oil supplies following the war in Ukraine and Western governments retaliated with sanctions on Russia, the world’s second largest crude oil producer. Oil producer.

Oil prices have fallen by more than a third from their peak in March, but it could take weeks before prices are filtered to the forecourt.

As per the latest RAC data, petrol is priced at 173.5p per liter while diesel is 184.2p per litre.

The fall in prices is being fueled by growing fears that the global economy is headed for a significant recession or even recession as growth in China and Europe remains weak.

Data published by Beijing this week has been worse than analysts expected, while in Europe, growth across the board has been weak, with signs especially coming from Germany.

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

Beijing’s zero-Covid policy and asset crunch have hurt both manufacturing activity and consumer spending.

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

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

China’s economy escaped a contraction in the second quarter, thanks to the lockdown of Shanghai’s commercial hub and a deep slowdown in the property market, as well as persistently weak levels of consumer spending.

The country’s property sector, shaken by mortgage boycotts as thousands of home buyers refused to make payments on unfinished flats bought from the scheme, also weakened in July.

Susannah Streeter, a senior analyst at Hargreaves Lansdowne, said: “Part of the concern about the dark prospects for global growth is growing as economies around the world slow down, with oil prices plunging on hopes of lower demand.

“Benchmark Brent crude fell below $94 a barrel, its previous level in February, amid concerns that China’s recent weakness will persist and widespread inflation will cause consumers and companies elsewhere to cut spending “

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