The price of oil experienced a significant drop on Monday, mirroring the decline in stock prices, as investors grew increasingly concerned about the state of the global economy.
US oil prices plummeted by 1.9% to $72.10 per barrel on Monday, while Brent crude, the international benchmark, saw a 1.5% decrease to $74.60 per barrel.
The recent downward trend in crude oil prices can be attributed to mounting fears of a potential recession that could negatively impact demand for travel and other fuel-related activities. Although a recession in the US may not be imminent, the rapidly increasing unemployment rate in the country is causing unease among investors.
Furthermore, worries about weakened demand from China are also contributing to the decline in oil prices, outweighing concerns about escalating tensions in the Middle East.
Despite the looming threats of a broader conflict in the Middle East, experts suggest that oil prices may remain at their current eight-month lows for an extended period. The global head of energy analysis at Oil Price Information Service noted that since the Hamas action on October 7, there has been a prevailing sense of indifference towards the potential risks of a larger regional war in the Middle East.
