CRUDE oil prices dropped below $100 a barrel and US petrol futures slumped yesterday, fuelling hopes that UK forecourt prices may fall substantially soon.
Crude futures plunged more than five per cent in the week’s second major oil price fall, with light sweet crude for June hitting a low of $97.50 (£59.55). Brent crude traded at a low of $111.95 per barrel, substantially down from highs of $126 seen at the end of April.
The downward pressure sparked hopes that UK petrol prices may fall in sympathy, though Brian Madderson, chairman of RMI Petrol, which represents independent fuel providers, said a sustained downward trend was not yet clear.
“In the short term it is the UK wholesale cost of fuel that determines prices at the pump, not the cost of Brent crude,” he said. “Wholesale prices have been extremely volatile over the past week or so, with daily moves of both plus and minus 2p-per-litre – so the trend is hard to fathom.”
UK retailers Tesco, Asda and Morrisons cut their petrol prices on Monday for the first time since last August. Tesco said then that most stores would cut petrol by 1p per litre (ppl) and diesel would fall by up to 3ppl.
Poor industrial data from China and an unexpected rise in US fuel stocks prompted a fall in wholesale fuel prices so great it triggered a circuit breaker on the Chicago Metals Exchange that saw futures trading blocked for five minutes. A group of 17 US senators also wrote to energy regulator the Commodity Futures Trading Commission calling for more action to end oil price speculation.
The fall in energy stocks also hit the Dow, which closed one per cent lower.