A new report has revealed that slowdowns in manufacturing and construction across the world has led to lower demand for oil which is in turn lowering the production of oil.

The slowdowns have been witnessed in the United States, Europe and China. In the US, industrial activity has actually declined for 14 straight months and a quick recovery might not be seen anytime soon.

In such circumstances, oil inventories are piling up and demand for new oil has declined. The lower demand is likely to push down prices.

It had been feared that attacks on vessels in the Red Sea could affect supply routes that could affect supply and cause prices to go up.

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However, the lower demand from industry and construction has proven to be a bigger factor.

Europe’s markets had turned to Middle East for their fuel this year during their first winter without Russian fuel High import levels were seen to ensure that there would be no shortage. However, stocks have now piled up.

Oman, a major oil producer has already factored in the oil price to hover around $60 for the upcoming year, indicating that the prices could go down over the next year.