World oil prices have risen above $ 120 (£ 94.90 a barrel) as record prices for petrol and diesel in the UK add to concerns over inflationary pressures. they confront families and businesses.
Brent crude, the international benchmark, rose $ 120 a barrel on Monday for the first time since late March, due to easing restrictions on Covid-19 in Shanghai and Beijing, a move that could lead to higher demand of China.
The possibility of a European ban on Russian oil imports also raised crude oil prices. European leaders have gathered to discuss the next package of EU sanctions against Russia over its invasion of Ukraine.
Analysts said rising oil prices could provoke further fears of inflation as the world economy absorbs the impact of the war. A sustained increase could also lead to higher profits for energy companies, after the UK government announced a £ 5bn extra tax on North Sea oil and gas producers to help fund financial support for energy companies. households struggling with the cost of living.
Jeffrey Halley, senior analyst at financial trading firm OANDA, said: “Markets with peak virus prices in Beijing and Shanghai are behind the rise in oil prices today, with a reopening of China likely to lead to a increased oil consumption.
“In addition, the EU’s ban on importing oil into Russia is still a work in progress, and if it is exceeded this week, expect supplies to tighten again. As such, the risks of a move are now increasing. towards the post-Ukraine highs we saw in February. “
Brent crude began the year below $ 80 a barrel, but reached a 13-year high of more than $ 130 in early March when the U.S. pushed for a ban on Russian oil imports. This brought inflation to its highest level in decades in many economies as heating and transportation costs for households and businesses skyrocketed.
It’s more expensive than ever to fill up in the backyards of the UK. Diesel hit a record 182.7 liters per liter on Saturday, according to Experian Catalist, taking on the cost of filling a 55-liter diesel car for over £ 100 for the first time.
Boris Johnson has reportedly ordered ministers to find ways to “expose” gas stations that fail to reduce the government’s fuel tax. Although Chancellor Rishi Sunak launched a 5 penny-per-liter cut in March, prices have risen to record highs.
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Analysts said Russia’s diesel exports had fallen sharply from pre-war levels. This is creating a supply constraint just as demand rises in many countries, including the United States, where the “driving season” has just begun: the summer period when gasoline demand is usually at its peak. algid.
The average price of petrol in the United Kingdom rose on Sunday to a record 172.7 liters per liter. The RAC anticipates further rises.
“With crude oil prices steadily above $ 115 a barrel last week, unfortunately the worst is yet to come just in time for the jubilee party, especially since gasoline is now more expensive than diesel in the wholesale market,” he said. say Simon Williams, the fuel of the RAC. spokesman.