News Column

Brent crude and petrol prices fall as oversupply offsets global risks

August 7, 2014


THE PRICE of brent crude hovered around a nine-month low yesterday, with plentiful supplies offsetting concerns of geopolitical risk in key oil producing countries.

The industry benchmark fell below $105 (62) a barrel due to oversupply, weak seasonal demand and the possibility of a deal between Russia and Iran, which would put more oil on the market. Russia is said to be considering a five-year deal to sell Iranian crude, to avoid Western embargoes on its energy sector.

Fears of unrest in Iraq and Libya failed to support the price compared to June, when concerns that Iraqi militant group Isis would capture the country's key oil reserves caused brent crude to rise above $115 a barrel.

Yesterday's low oil price had a knock-on effect on the cost of wholesale petrol, which fell below 1 a litre for the first time since February 2011.

RAC is today calling on fuel retailers to pass the savings on to motorists at the pumps.

"The fact this has not happened for nearly three and a half years demonstrates how much fluctuation there can be in the global fuel market and what a difference it can make on the forecourt," said a spokesperson.

"We can only hope these favourable conditions continue so that individual motorists, businesses and the economy can benefit for some time."

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Source: City A.M. (UK)

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