The price of Brent Crude, the international benchmark for oil, has dipped below the $70 (R1,251) per barrel mark for the first time since late 2021.
Oil receded 3.7% to $69.19 per barrel at the close of trade on Tuesday, and was trading only marginally firmer at $70,21 on Wednesday morning, as concerns about slowing global economic growth persisted.
This situation bodes well for additional fuel price cuts for South Africans at the beginning of October, with the latest daily snapshot from the Central Energy Fund (CEF) showing a possible petrol price cut of around R1.30 for 95 Unleaded and R1.11 for 50ppm diesel.
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This would be the fifth consecutive month of fuel price decreases for the country, following September’s 92 cent cut.
Tamas Varga, Analyst at PVM Oil Associates said lower demand estimates were just one of the factors currently weighing on international oil prices.
"Chinese economic woes - August crude oil imports fell seven percent on the year - and the growing belief that the Fed will only cut 0.25 percent next week weigh more heavily in the current sell-off," Varga told AFP.
Ipek Ozkardeskaya, Analyst at Swissquote, said the recent decision by OPEC+ members to delay production increases was simply not enough to keep oil prices from tumbling.
"Oil bulls are not willing to swim against such a strong tide - and that also adds to the momentum," Ozkardeskaya stated.
– Additional reporting by AFP
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