The Brent benchmark has dropped to its lowest level since January 14.
Trading data shows that oil prices went down on Monday, reaching their lowest level since the beginning of the year.
On the London Intercontinental Exchange, the price of Brent crude oil futures for November fell by 2.4%, to $84.55 per barrel. This is the European standard. Brent fell below $85 per barrel for the first time since January 14.
US benchmark West Texas Intermediate crude fell 2.6% to $77.24 per barrel, which is its lowest price since January 6.
Analysts who spoke to RBK said that the current drop in oil prices is due to a stronger US dollar, the expectation of more interest rate hikes by central banks around the world, and fears of a recession.
Analysts say that rising interest rates could hurt the global economy and cause a recession, which would lower the demand for fuel. A stronger US dollar also makes it harder for people who don’t use dollars to buy oil.
Sugandha Sachdeva, vice president of commodity research at Religare Broking, told Reuters, “Global monetary policy tightening by the key central banks to stop high inflation and a splendid run-up in the greenback to more than two-decade highs have raised concerns about an economic slowdown and are a key headwind for crude prices.”
The markets are now waiting for the next meeting of OPEC+ on October 5. At the moment, the group isn’t producing as much as it was supposed to. In August, it missed its goal by 3.58 million barrels per day.