Oil prices have crashed to a new four-year low, below $72 per barrel, after a major split inside Opec forced the cartel to hold production at current levels rather than make cuts to try to turn the market around.
The reduced cost of energy – prices are now down 37% since the summer – should be a boost to British consumers and the wider economy. Lower prices have already led to lower heating oil prices, petrol and diesel bills for motorists and the transport sector which should feed through into manufacturing. But cheaper fuel will also lower the UK inflation rate, which at 1.3% is already well below the Bank of England’s target rate of 2%.
The falling oil prices comes soon after recent figures showing that heating oil is only 2% more expensive than mains gas and is great news for all our home heating oil customers who face lower Winter heating costs than recent years.