Oil prices in the world continue to fall today (Thursday) by another 2% to the level of 93.6 dollars per Brent barrel.
We will remind that the price per barrel reached the peak of the year - at the beginning of March with 128 dollars per barrel - after Russia's invasion of Ukraine.
This is a process that is expected to continue and directly affect the price of fuel in Israel - to the benefit of consumers.
Among the main factors for the drop in prices are investors' concerns about the American and European economies sliding into recession in 2023, which resulted in a decrease in demand for oil.
In addition to this, the drop in the price of oil can be explained by the significant moderation in growth in China, which also stems from the country's corona lockdown policy.
Oil drillers.
Photo: Reuters,
The stock exchange in New York.
A chance of curbing inflation, photo: AP
Just today, for example, the Chinese government imposed a lockdown on the city of Chengdu due to 157 new corona cases.
It is the most populated city in the province of Sichuan in the west of the country and more than 21 million inhabitants live there.
Beyond that, the impact of the emerging nuclear agreement with Iran and the possibility of removing the sanctions on oil exports from Iran are leading to a drop in the price of oil.
The chief economist of the consulting firm BDO, Chen Herzog, estimates that oil prices will fall in about three years to the level of about 75 dollars per barrel - a drop of about 25% compared to the average this year.
"The drop in oil and commodity prices in the world, together with the rise in interest rates and the economic slowdown, increase the chance of curbing global inflation. Estimates are that next year the rate of inflation in the US will return to a level of about 2.5%, that is, curbing the inflationary outbreak."
Herzog points out that "every $10 drop in the world oil price results in a drop of 20 cents per liter in the price of gasoline in Israel," adds Herzog.
Deserted streets due to the corona lockdown in Xi'an, China, photo: AP
The meeting on the future of the nuclear agreement in Vienna (archive), photo: Reuters
Modi Shafrir, chief financial markets strategist at Bank Hapoalim, also estimates that the downward trend in fuel prices recorded in recent months in Israel is expected to continue.
"At the current price level of input prices, fuel prices are expected to continue to decrease in October as well, although it is still too early to draw final conclusions," he explains in a conversation with Israel Hayom.
Shafferer explains that "concurrently with the sharp drop in oil prices, there has also been a sharp drop in refining margins in recent times - a fact that led to the sharp drop in fuel prices in Israel in August and September, in addition to the lowering of the excise tax."
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