Oil prices have declined by 2% due to volatile markets and concerns that an economic slowdown this year will affect fuel demand.

International Brent crude futures dropped by 1%, or 53 cents, at $54.38 a barrel, while US West Texas Intermediate (WTI) crude oil futures declined by 1.8%, or 82 cents, from their last settlement to $45.72, Reuters reported.

Introduced last March, China’s Shanghai crude oil futures have since established a slight but steady price premium over the Brent benchmark.

“Fears of future economic and earnings growth continue to be the main driver in causing market jitters.”

Respondents to a survey by the news agency said that in physical oil markets, Saudi Arabia is expected to reduce prices next month for heavier crude grades sold to Asia by up to 50 cents a barrel. This may be due to weaker fuel oil margins.

Phillip Futures told Reuters: “Fears of future economic and earnings growth continue to be the main driver in causing market jitters.”

Investors are worried due to the slowdown in China and turmoil in stock and currency markets, including oil markets.

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Phillip Futures added that a negative effect on oil prices is expected due to slowing economic growth as markets consider the potential for softer petroleum demand.

Late last year, crude production in the US stood at a record 11.7 million barrels per day (Mbpd), while Russian output reached more than 11Mbpd.

December exports of Iraq were recorded at 3.73Mbpd, an increase from 3.37Mbpd in November.