Yahoo Finance Sliding Oil Price Could See '£1 Petrol' Return
The global oil price is slipping towards its lowest point of 2015, caused by over-supply and a slump in the Chinese economy.
The RAC says petrol prices could again fall close to £1 per litre if the price goes much lower.
"If Brent Crude were to move to the $40 per barrel mark, the prospect of some enterprising retailers selling fuel for £1 per litre will make a return," said spokesman Rod Dennis.
It (Other OTC: ITGL - news) comes as Asda announced another 2p cut to the price of unleaded to 109.7p per litre - a move followed soon after by Sainsbury (Amsterdam: SJ6.AS - news) 's and Morrisons.
Tesco (Xetra: 852647 - news) also announced a 2p cut per litre, to come into effect at 1pm on Friday afternoon.
In the US, crude oil is facing its longest run of weekly declines in almost three decades.
US crude dropped 30 cents by 9am this morning in London, to reach $41.02 a barrel.
Brent North Sea crude was down to $46.42 after settling 54 cents lower on Thursday.
The lowest price registered by Brent crude this year was $45.10 on 13 January. In June 2014, a barrel was worth $115.
Oil has lost 32.9% of its value since May and more than half of its worth (54.7%) since this time last year.
The slide is mostly due to a global surplus, with the International Energy Agency (IEA) warning production had to slow from its current "breakneck speed".
It said supply is already outstripping consumption by three million barrels a day.
It predicted the glut would persist into next year, despite growing demand for the commodity due to the collapse in prices.
The Organisation of the Petroleum Exporting Countries, or OPEC, is showing division over how to address the slump.
Reports suggest many smaller members are putting pressure on Saudi Arabia – whose main export is oil – to agree to crisis meetings.
Algeria is understood to have asked for urgent action, particularly on the oil production ceiling which governs the amount countries are allowed to produce.
It currently sits at 30 million barrels of oil a day, a level not scheduled to be reviewed until December.
Some nations have suggested lowering this threshold would reduce supply and drive up value.
But Saudi Arabia, which has enough of a financial cushion to sustain itself through the slump, seems content to allow the market to dictate prices.
The decline in the Chinese financial system is also having an effect as investors fret over its industrial contraction and the chances of it reducing the demand for oil even further.
