The reasons for the decline in oil prices and will the decline continue?
With the beginning of trading on Monday, oil prices fell by about 5%,
and thus reached a successive decline during the current period,
which is the opposite of the price trend since the start of the Russian war on Ukraine,
and prices had witnessed some high fluctuations,
but while maintaining the movement at high price levels generally.
topic
Reasons for the drop in oil prices
Britain’s unemployment rate has fallen to its lowest level in 48 years.
Reasons for the drop in oil prices
Observers described that the main decline in oil prices is due to the disappointing
performance in the situation of the Chinese economy,
at a time when China lowered its forecast for economic growth this year by 4% after it was targeting 5.5%,
and this came amid some warnings that economic growth in China It may reach 3.4% during this year,
with the continuing obstacles facing Beijing,
which is the second largest global economy.
The shock indicated the decline in Chinese industrial output by about 3% in the second quarter of this year,
with expectations indicating growth by about 4%,
and this sector represents the highest consumption of oil in China,
which makes it the main reason affecting demand and thus oil prices.
She indicates that this matter will have two bad effects on the price of oil,
the first of which is the increasing fears of a possible recession in the global economy,
at a time when the US economy has entered a state of technical stagnation
with negative growth for two consecutive quarters.
The second thing is that the suffering experienced by the two largest economies in the world at present,
namely, the American and Chinese economies,
which account for 36% of global production,
this also reflects negatively on prices and pushes them further down.
Russia is pumping gas in larger quantities to Europe
With Russia’s decision to return to pumping gas in larger quantities than previously,
in light of the crisis that Europe has experienced in terms of energy
and the growing fears that the matter will worsen in the winter,
which may push it to buy energy at any price,
but this also comes in light of the extreme caution of the complete interruption
in the Any time with the escalation of the Russian war on Ukraine.
The rise of the dollar came again after the decline it witnessed during the last few period,
which caused a drop in oil prices
The expectations of the “Goldman Sachs” bank indicated a reduction in oil price
expectations for the second quarter of this year to 110 dollars,
while the previous expectations indicated 140 dollars.
Britain’s unemployment rate has fallen to its lowest level in 48 years.
In the United Kingdom,
unemployment rates stabilized at 3.8%, to come in line with expectations,
and thus remain at their lowest levels in half a century.
The number of vacancies in the United Kingdom decreased by 19.8 thousand jobs,
according to official data, for the first time since August 2020,
to reach 1.27 million in the second quarter of this year,
in light of the decline in real wages at the highest rate ever,
as it decreased by about 3%. During the same period of this year,
and thus the largest percentage of decline since 2001,
which increases the burden of high inflation on consumers and companies.
It is worth noting that such figures are evidence of the slowdown in the economy,
which reached its lowest level in 40 years.
The Bank of England always seeks to raise interest rates to reduce the wage spiral,
with expectations of raising unemployment to 6% in light of a recession over the next three years,
from 3.8% recorded in July.
Currently, many companies in Britain are resorting to reducing basic workers’ wages
while being cautious about hiring in light of high inflation.
Expectations had indicated an increase in the number of workers to 256 thousand,
but the results were less than expected in the period from April to June by about 160 thousand workers.
Expectations also indicate the standard of living
and the resulting pressure will affect the economy by the end of this year,
which may lead to an increase in the unemployment rate,
although the Bank of England will not refrain from raising interest rates.
Britain’s economy unexpectedly contracted in March of this year,
with the cost of living pressured and consumer spending cut back.
The National Statistics Office had indicated
that the gross domestic product fell by 0.1% on a monthly basis,
in light of steady growth, which means that the economy expanded by only 0.8%
in the first quarter of the year and less than expectations that indicate only 1%.
artical name The reasons for the decline in oil prices