Motorists may finally have some good news of sorts after oil prices fell back below the levels seen when Russia invaded Ukraine.
Brent Crude slipped on Tuesday, dropping 0.8 per cent to $94.21 (£78), while the North American benchmark price, West Texas Intermediate fell 0.4 per cent to $88.98 (£74).
Drivers have faced record prices at the pumps in recent weeks after the war in Ukraine sparked fears about global oil supplies and caused Western governments to retaliate with sanctions on Russia, the world’s second-largest producer of crude.
Oil prices have fallen by more than a third from their peak in March but prices may take several weeks to filter through to forecourts.
Petrol is 173.5p per litre while diesel is 184.2p, according to the latest figures from the RAC.
The fall in prices is being driven by growing fears that the global economy is heading for a significant slowdown or even a recession as growth weakens in China and Europe.
Data published by Beijing this week has come in worse than analysts had expected while in Europe, growth has been weak across the board, with particularly concerning signs coming from Germany.
The central bank in China, the world’s largest crude importer, cut interest rates to revive demand as data showed the economy slowing unexpectedly in July.
Manufacturing activity and consumer spending have both been damaged by Beijing's zero-Covid policy and a property crisis.
Factory output in the country’s industrial sector grew by 3.8 per cent in July from a year earlier, below analysts’ forecasts for growth of 4.6 per cent in a Reuters poll.
Retail sales rose by 2.7 per cent from a year ago, again significantly below expectations, as China’s economic recovery from pandemic lockdowns earlier this year showed signs of fizzling out.
China’s economy narrowly escaped a contraction in the second quarter, hobbled by the lockdown of the commercial hub of Shanghai and a deepening downturn in the property market, as well as persistently weaker levels of consumer spending.
The country’s property sector, rocked by a mortgage boycott as thousands of homebuyers refuse to keep up with payments on unfinished flats bought off plan, also weakened in July.
Susannah Streeter, a senior analyst at Hargreaves Lansdown, said: “A slick of worry is growing about the darkening prospects for global growth as economies slow around the world, pushing down oil prices in expectation of lower demand.
“The benchmark Brent Crude fell back to below $94 a barrel, to a level it was last at in February, amid worries China’s recent weakness will persist and that rampant inflation will cause consumers and companies elsewhere to cut back expenditure.”