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  • Oil Prices Hit Four Year High

Oil Prices Hit Four Year High

Feb 21 2018 Read 1061 Times

Up until mid-2014 oil prices hovered at around US$110 a barrel. Though in the face of a deep global recession this plummeted to as low as US$40. While the industry is now stabilising, it's hard to get too optimistic. From global surpluses and a looming fossil fuels crisis, oil prices still face a host of challenges.

It isn't all doom and gloom though, with the price of Brent crude recently spiking to US$70 a barrel for the first time since 2014. It was sparked by a snap decision from OPEC, with Suhail al-Mazrouei, UAE oil minister and OPEC president confirming that the cartel will continue to limit supplies until the end of the year. The organisation is made up of 14 oil-producing nations and currently represents 40% of the world's output. Unsurprisingly, it's not afraid to flex its muscles when it comes to stabilising oil prices.

Motorists could take a hit

While it's good news for investors, the RAC has warned that rising oil prices could lead to a spike in fuel. According to the group, a strengthening crude market could trigger "a knock-on effect in the forecourt due to the increase causing the wholesale price of fuel to rise". Meanwhile, groups like the AA are asserting that this could be countered if supermarkets resume their petrol price war. This will offer welcome relief to motorists, as the price of unleaded petrol has already increased by almost 5p since November. Meanwhile, diesel prices have also climbed 3p over the same period. For Brits, this means that the average cost of filling a 55-litre family car now sits at around £66.69 for petrol and £68.18 for diesel.

An "inevitable" price hike

An RAC spokesman warns that "If oil stays at this level, pump price hikes will be almost inevitable." And with Brits still feeling the Christmas cash crunch, this is the last thing the UK needs. The RAC also warns that rising fuel prices could have a negative impact on businesses, as well as further fuel inflation. The AA took a more optimistic approach, stating that "oil at $70 a barrel has yet to threaten a pump price surge on UK forecourts."

While crude prices are volatile, transportation is also a major issue faced by the oil and gas industry. Pipelines play a major role in transporting oil across the globe, but are they safe? Spotlighting the risks associated with radiographic inspection, 'Sounds good – Using ultrasound for safer pipeline inspections' introduces a new, safer era of x-ray technology.

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