Oil price eases but petrol peaks

03-01-2008

Oil price eases but petrol peaks
The price of oil has dropped slightly today after edging above the $100-a-barrel milestone for the first time.

But UK motorists are set to face continuing high prices at the pumps, with British forecourts seeing record petrol prices for the start of a new year.

Oil prices surged to a record of $100 (£50.4) a barrel yesterday, driven by unrest in producing countries and the weak American dollar.

The rise resulted in falling share prices in Wall Street and fears that it could lead to an increase in inflation, but the situation has lightened slightly this morning.

London Brent crude dropped back to £95.23 a barrel after US prices also slipped, with West Texas Intermediate Crude Oil at $96.87 a barrel this morning.

But fuel costs are set to remain high for the coming months, with fears of continued unrest in Algeria, Pakistan and Nigeria in an already-uncertain financial climate set to drive prices up.

The AA says the average UK price for unleaded petrol is at a record 103.03p per litre, while diesel is 0.05p off its record price at 107.95p per litre,

Such prices mean that the average motorist needs to fork out an extra £7.36 to fill up a 50-litre tank than at the start of last year.

"With oil prices again rising above $95 a barrel, the start of the year shows little sign of relief for UK motorists," Paul Watters, head of AA public affairs, said.

"We had hoped that petrol and diesel prices had hit a plateau that reflected the price of oil above $90 a barrel. If the two new highs turn out to be blips, it will underline the importance of supermarkets in holding down the price of car fuels."

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