Fuel price warning as oil hits 10-month high – BBC

Drivers have been warned of rising fuel prices after global oil prices hit their highest level in 10 months.

Brent crude, a price benchmark, rose above $95 a barrel on Tuesday amid tighter supply forecasts.

The International Energy Agency (IEA) said Saudi Arabia and Russia’s decision to cut production could lead to a “significant supply gap” by the end of this year.

Automotive group RAC warned that drivers were in for a “tough time” at the pumps.

The latest figures show that UK drivers now pay on average £1.55 per liter, and diesel £1.59. This is an increase from around £1.44 and £1.53 in May.

After Russia invaded Ukraine in February 2022, oil prices skyrocketed, reaching more than $120 per barrel in June last year.

They fell back to just over $70 a barrel in May this year, but have continued to rise since then as producers attempt to restrict production to support the market. Saudi Arabia and Russia, members of the OPEC+ group and two of the world’s largest oil-producing countries, decided to cut production earlier in August.

Meanwhile, the U.S. Energy Information Administration said Monday that U.S. oil production from major shale-producing regions is expected to decline in October for the third consecutive month, hitting its lowest level since May.

As the largest exporter and leader of the pack, Saudi Arabia wants oil prices to remain high to ensure it has a steady stream of revenue while attempting to diversify its economy.

However, the West has accused OPEC, whose members meet regularly to agree on production levels, of manipulating prices.

Analysts warn that rising global oil prices could impact inflation – the rate at which prices rise – in many countries. Inflation soared in 2022 and has only recently started to fall.

“The symbolically important $100 [a barrel of oil] is now being considered again,” said Sophie Lund-Yates, senior equity analyst at investment firm Hargreaves Lansdown.

“This is a difficult development, with fuel accounting for a significant portion of overall inflation.”

The latest UK inflation figure will be published on Wednesday by the Office for National Statistics (ONS). Inflation has fallen in recent months but remains high at 6.8%.

In recent years, households have faced higher fuel and energy bills, while businesses have raised prices to cope with rising costs.

Gasoline and diesel prices have surged in recent months, and further increases could come due to crude oil being the main component of the fuel, auto groups say.

The AA warned that the price rise comes at a time when energy efficiency typically declines due to darker evenings.

“Motorists have been hit by a 10p a liter rise in the price of petrol since the start of August,” said Luke Bodset, the AA’s spokesman for pump prices.

“The only things in their favor have been daylight, even during rush hour, and mild weather, which means less fuel consumption. The drivers who are now starting to feel happier are those who drive cars electrical.”

RAC Fuel spokesman Simon Williams said with oil rising towards $100 a barrel, drivers would “have a tough time at the pumps”, but added that a triple-digit rise “is unlikely to reality only increase the average price by an extra 2 pence. .

But he warned: “If retailers intend to make more money per liter with increased margins, then it could be closer to 160p.”

A recent fall in the pound may have made fuel even more expensive. Besides supply and demand, oil prices are also affected by the exchange rate between the British pound and the dollar, with Brent crude traded in dollars.

Saudi Energy Minister Prince Abdulaziz bin Salman on Monday defended OPEC+’s moves to restrict supply, saying energy markets needed light-touch regulation to limit volatility.

Drivers have been warned of rising fuel prices after global oil prices hit their highest level in 10 months.

Brent crude, a price benchmark, rose above $95 a barrel on Tuesday amid tighter supply forecasts.

The International Energy Agency (IEA) said Saudi Arabia and Russia’s decision to cut production could lead to a “significant supply gap” by the end of this year.

Automotive group RAC warned that drivers were in for a “tough time” at the pumps.

The latest figures show that UK drivers now pay on average £1.55 per liter, and diesel £1.59. This is an increase from around £1.44 and £1.53 in May.

After Russia invaded Ukraine in February 2022, oil prices skyrocketed, reaching more than $120 per barrel in June last year.

They fell back to just over $70 a barrel in May this year, but have continued to rise since then as producers attempt to restrict production to support the market. Saudi Arabia and Russia, members of the OPEC+ group and two of the world’s largest oil-producing countries, decided to cut production earlier in August.

Meanwhile, the U.S. Energy Information Administration said Monday that U.S. oil production from major shale-producing regions is expected to decline in October for the third consecutive month, hitting its lowest level since May.

As the largest exporter and leader of the pack, Saudi Arabia wants oil prices to remain high to ensure it has a steady stream of revenue while attempting to diversify its economy.

However, the West has accused OPEC, whose members meet regularly to agree on production levels, of manipulating prices.

Analysts warn that rising global oil prices could impact inflation – the rate at which prices rise – in many countries. Inflation soared in 2022 and has only recently started to fall.

“The symbolically important $100 [a barrel of oil] is now being considered again,” said Sophie Lund-Yates, senior equity analyst at investment firm Hargreaves Lansdown.

“This is a difficult development, with fuel accounting for a significant portion of overall inflation.”

The latest UK inflation figure will be published on Wednesday by the Office for National Statistics (ONS). Inflation has fallen in recent months but remains high at 6.8%.

In recent years, households have faced higher fuel and energy bills, while businesses have raised prices to cope with rising costs.

Gasoline and diesel prices have surged in recent months, and further increases could come due to crude oil being the main component of the fuel, auto groups say.

The AA warned that the price rise comes at a time when energy efficiency typically declines due to darker evenings.

“Motorists have been hit by a 10p a liter rise in the price of petrol since the start of August,” said Luke Bodset, the AA’s spokesman for pump prices.

“The only things in their favor have been daylight, even during rush hour, and mild weather, which means less fuel consumption. The drivers who are now starting to feel happier are those who drive cars electrical.”

RAC Fuel spokesman Simon Williams said with oil rising towards $100 a barrel, drivers would “have a tough time at the pumps”, but added that a triple-digit rise “is unlikely to reality only increase the average price by an extra 2 pence. .

But he warned: “If retailers intend to make more money per liter with increased margins, then it could be closer to 160p.”

A recent fall in the pound may have made fuel even more expensive. Besides supply and demand, oil prices are also affected by the exchange rate between the British pound and the dollar, with Brent crude traded in dollars.

Saudi Energy Minister Prince Abdulaziz bin Salman on Monday defended OPEC+’s moves to restrict supply, saying energy markets needed light-touch regulation to limit volatility.