August 31 saw oil prices drop to under $49 per barrel. This came immediately after two days of a six-week high in prices.
It is believed that the fall in oil prices was caused by an excess oil and renewed concern about the state of China’s economy.
Only last week, Brent Crude, which sets the International benchmark for oil prices, climbed 10%, but was still on course for its fourth month of decline, having only risen twice in the last 14 months.
At around 11:00 GMT Brent prices were down to $48.40 per barrel – a loss of $1.25 on the previous day, whilst U.S. crude, which had a 12% increase last week, was down to $44.30 – a drop of just under a dollar.
Speaking to CNBC about the fall, Olivier Jakob, an analyst at Petromatrix said:
“Volatility was high last week, so now we’re seeing some retracement—$50 is proving to be a resistance level. It is still a market which is very well supplied.”
Those in the oil industry are well aware of the up and down prices of the resource, and how this can have temporary effects on the prices of products like Shell Omala S2 G 320, and other oils and lubricants.
Volume was expected to be lower because it is a bank holiday here in the UK, and the uncertainty in the Chinese market whose activity is likely to have shrank this month, both, no doubt played a part in the fall in prices, as is the excess supply of oil, which is having a negative effect on oil prices across the globe.