Yahoo Finance Oil swings as fuel prices cling to record highs
Oil prices edged lower amid a volatile trading session on Monday as UK fuel prices have clung to record highs despite almost a month of falling wholesale costs.
Brent oil (BZ=F) fell as much as 0.5% to $111.11 (£91.60) a barrel, while US light crude (CL=F) pushed 0.6% lower to $107.86. The benchmarks fell sharply, but both rose 1.2% on Monday afternoon.
Petrol hit a new all-time high of 191.53p a litre on Sunday while diesel remains close to record levels at 199.03p a litre, near the all-time high of 199.09p set on 25 June, according to RAC.
Fuel prices have been driven higher in recent months by Russia’s invasion of Ukraine since February.
RAC fuel spokesman Simon Williams said: "There doesn’t appear to be any sign that retailers are reducing their forecourt petrol prices despite average weekly wholesale costs having fallen for five straight weeks.
"The average cost of delivered unleaded was 145.7p a litre last week which after adding 7p a litre retailer margin and 20% VAT produces a price of 183p.
"Despite this the big four supermarkets, which dominate fuel sales, are standing firm with a litre of petrol at their stores costing an average of 190.19p."
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Oil giants BP (BP.L) and Shell (SHEL.L) rose 4.5% and 3.9%, respectively, as crude prices edged higher on concerns about tight supplies amid lower OPEC output, unrest in Libya and sanctions on Russia.
"A small bounce back in the oil price was enough to give BP and Shell a lift," said Russ Mould, investment director at AJ Bell. "Oil supplies have been watched closely in recent weeks amid concerns about a slowdown in the global economy."
"Fundamentally, supplies continue to be tight and there is still enough economic activity to stop oil prices slumping. However, lingering recession fears could act as a ceiling on the oil price."
Meanwhile, European natural gas (NG=F) prices jumped to their highest level in almost four months on Monday as strikes in Norway threaten to wreak more havoc amid supply cuts from Russia.
Benchmark European prices surged as much as 9.8% in early trade, while the UK equivalent was up 20%.
Norway’s oil and gas lobby warned around 13% of the Nordic country’s daily gas exports are at risk from plans to escalate an impending strike by managers.
Three fields are set to be closed by the strike starting from Tuesday, while planned action the following day would take out another three projects.
The move will adds to concerns that the continent may not have enough gas to fill storage sites in time for winter as Russian president Vladimir Putin has slashed shipments to the bloc through the Nord Stream pipeline, while a major fire at a key export facility in the US has also hit deliveries.
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It comes as campaigners in the UK have blocked major motorways in a protest over soaring fuel prices.
Howard Cox, founder of the FairFuelUK Campaign, said: "These are not just demonstrations against the record excruciatingly high petrol and diesel prices that rise each and every day.
"They are also about the sickening chronic manipulation of pump prices and the complete lack of scrutiny by our out of touch government, in allowing unchecked petrol and diesel profiteering to run rife."
