Crude oil rush increases price of petrol

Crude oil rush increases price of petrol

As a result of the oil price rebound, petrol prices have increased for the second consecutive month this year.

A 25 per cent increase in the cost of a barrel of oil from $US36.51 to $45.49 has caused the highest price since November 2015, according to motoring group RAC’s April data.

The average price of both oil and petrol has increased by more than 2p a litre to 108.27p.

Simon Williams, RAC’s fuel spokesperson said it’s unlikely that oil will rise above $50 per barrel.

“The physical or spot price of Brent crude oil saw its largest one-month gain in price in the past 12 months,” explained Williams.

The rise of oil is a result of the US shale production collapse, but oil is still trading well under highs of mid-2014 when it hit $115 per barrel.

“For some time Opec has been operating an overproduction strategy to keep prices low to stop the US producing oil from fracking, but April saw a reduced production from Iraq and Nigeria due to supply disruptions and from the UAE due to maintenance,” Williams added.