Oil price slumps below $80 for first time since July

The price of a barrel of oil crashed below $80 for the first time in nearly four months last night.

On another day of turmoil on global commodity markets, Brent crude fell as low as $79.20 having been trading at close to $97 in late September.

The slide below $80 – for the first time since July – will be welcomed by businesses and motorists who could see cheaper petrol and diesel prices on garage forecourts.

It also comes as a boost to central banks, including the Bank of England, as they battle to bring inflation under control in the wake of lockdowns and the war in Ukraine.

Just last week, the World Bank warned that oil could top $150 a barrel if the war between Israel and Hamas triggers a full-scale conflict in the Middle East.

Since then, however, oil prices have eased on concerns over waning demand, particularly in China where the economy is faltering. 

This is outweighing concerns about supply – at least for now.

‘The market is clearly less concerned about the potential for Middle Eastern supply disruptions and is instead focused on an easing in the balance,’ said ING analysts Warren Patterson and Ewa Manthey in a report.

There are also fears of recession in the eurozone, which would hit demand on the Continent.

‘The meltdown we’ve seen in prices is reflecting two things: concerns about the global economy hitting a brick wall based on data out of China and also a sense of confidence that the war in Israel and the Gaza Strip is not going to impact supply,’ said Phil Flynn, analyst at Price Futures Group.