Crude oil surge pushes up the price of petrol at the pumps
Motorists have suffered the second consecutive month of price rises at the pumps as a result of the rebound in the oil price.
A 25 per cent increase in the cost of a barrel of oil from $36.51 to $45.49 has sparked the highest price since 10 November 2015, motoring group RAC data for April shows.
The average price of both petrol and diesel has gone up by more than 2p a litre to 108.27p and 108p respectively.
RAC fuel spokesman Simon Williams said it's unlikely that the oil will rise above $50 per barrel as expensive US shale would return to the market.
He said:
“The physical or spot price of Brent crude oil saw its largest one-month gain in price in the past 12 months. While this has had an adverse impact on the price motorists are paying for petrol and diesel on the forecourt, the world is still producing too much oil which means prices should not rise much further, and may stabilise or even start to fall again.”
The oil price rise is a result of both the collapse in US shale production as rigs close down and hopes global demand for oil will pick up in the second half of the year.
Oil is still trading well under highs in mid-2014 when it reached $115 per barrel.
Williams added:
The world oil market is currently in a very unusual situation. For some time Opec (the Organization of the Petroleum Exporting Countries) has been operating an overproduction strategy to keep prices low to stop the US producing oil from fracking, but April saw reduced production from Iraq and Nigeria due to supply disruptions and from the United Arab Emirates due to maintenance.
Across the UK, the South East saw the biggest increases with more than 3p a litre going on both the average prices of petrol and diesel – unleaded went from 105.48p to 108.89p and diesel from 105.52p to 108.9p.
The East Midlands recorded the lowest petrol price rise of 2.77p a litre from 105.4p to 108.17p.