It has been announced that fuel prices will continue to fall as the cost of Brent Crude oil is halved. A barrel of Brent Crude now costs $55 a barrel, in comparison with $115 six months ago.
The big four supermarkets have said that they will cut petrol and diesel prices by 2p a litre. Some have predicted that prices could fall as low as £1 per litre, which would be a welcomed by motorists and businesses alike.
The current price is the lowest since May 2009 and has caused a wider selloff. There are concerns that the falling price will affect the commodity heavy FTSE 100. The UK index is made up of 23% oil producers and mining companies and experienced a slump of 77.7 points. Those that dropped the most were producers of oil and gases pumps.
Despite the notable drop in price and therefore profits, those exporting oil are not yet displaying too much concern. The Organisation of Petroleum Exporting Countries has agreed to remain producing 30 million barrels a day, even though the high levels of oil production have contributed to this fall in price.
This article follows on from ‘Russian Economy at Risk of Meltdown’ and will be updated as more information is provided.