The price of a barrel of US oil has fallen to its lowest level since January on concerns about a weakening global economy.

The strong dollar also pressures oil prices because oil is settled in the US currency, causing traders with other currencies to lose more. Earlier this year, oil prices rose sharply because of the war in Ukraine.

The price of a barrel of US oil, West Texas Intermediate (WTI), was nearly 2 percent lower on Wednesday morning at just over $85. Brent oil, the leading oil source from Europe, the Middle East and Africa, fell 1.7 percent to $91.29 a barrel (from 159 litres).

Prices have been falling for some time on concerns about a recession caused by high inflation and strong interest rate hikes from central banks. Furthermore, the strict corona lockdowns in China are slowing down the demand for oil in the world’s second-largest economy. China is the world’s largest importer of crude oil.

The group of oil cartel OPEC and allies such as Russia and Kazakhstan, OPEC +, announced Monday that it will cut production by 100,000 barrels per day in October to support oil prices.

Falling oil prices may help reduce inflation by lowering pump prices. In June, the average recommended price for Euro95 petrol in the Netherlands rose to the record level of 2,504 euros per litre. The recommended retail price is now 2,154 euros, according to consumer collective UnitedConsumers. Motorists usually only pay these prices along highways. As a result, prices are often lower at pump stations elsewhere.

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