The price of Brent crude oil fell by 6% to US$53 on the 5th of January, signalling the worst first Monday of the year on record for the UK’s bluechip index. With West Texas Intermediate also dropping to a five year low of US$50, there is a growing concern between investors, that a weakening demand could see a further decline in weeks to come.
The latest slump, which has seen the price of Brent Crude oil half from this time last year, is further evidence of OPEC’s decision to continue at the same production rate, despite the current dwindling demand for oil.
As Brent crude decreases, economic growth is expected to increase, as lower oil prices will see business costs cut and disposable incomes grow. In particular, UK consumer spending is currently overseeing the benefits, as supermarkets reduce fuel prices by up to 2p a litre.
Adapted from press release by Joe Green