Global oil prices circled two-month highs today, having been sent higher by worries about the impact on supply of Hurricane Beryl as it blew through production areas in the Carribbean.
The move stoked fears that expensive fuel prices would linger in the UK, after a period when falling crude prices did not bring them down far enough according to motorists’ groups.
Brent crude, the benchmark oil price, stayed around $87 a barrel today. It was also tracking the sustained political tension in the Middle East and the start of a period of peak demand in the US, when people take to the roads for summer around the 4 July public, in what is known as peak driving season.
Earlier this week inventory numbers from the US showed stockpiles of fuel falling below average levels for the time of year.
And members of the Opec oil exporting nations’ cartel implied that production cuts agreed last month – which had sent Brent to a a low just under $77 – would only apply if market conditions were suitable
Brent slipped on the day – by 0.5% to $86.92 – leaving it around levels last hit in late April.
According to David Morrison, at Trade Nation , “further gains look possible” for the price, with “no evidence that crude is overbought”.
He also pointed out that the milestones for Brent around April came when prices were beginning their last significant descent” leaving the market sensitive to the outlook for any disruption to supply.
Brent crude oil feeds through to prices at the pumps, and motorists’ group the RAC said this week that it was still too expensive. Its warning came even after an overall drop in June, in line with the prevailing market conditions then in force after the Opec decision.
The RAC said the average price of petrol nationwide was “just under 145p a litre – down from 148p at the start of the month”.
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It added: “Both petrol and diesel are still too expensive on forecourts in England, Wales and Scotland.
The group’s head of policy Simon Williams said:
“While oil has increased from under $80 at the start of June to the mid-$80s by the end, wholesale costs are still low enough to merit cheaper prices at the pumps.
“Looking at the fairer average prices charged in Northern Ireland, petrol should be 4.5p lower across England, Scotland and Wales and diesel should be a whole 8p less.”
