Signs point to cheaper petrol soon

The Northern Advocate - - Business - Liam Dann

The odds on cheaper petrol for the Christ­mas hol­i­days just got bet­ter as OPEC talks in Vienna ended with­out a deal on oil pro­duc­tion cuts.

Crude oil prices slumped as much as five per cent in ini­tial trad­ing yesterday.

The crude oil price surged so much this year it sparked fears about petrol head­ing to­wards $3 a litre. Then it crashed so hard we are now more likely to see it be­low $2 a litre by Christ­mas.

Drivers have al­ready en­joyed 12 petrol price cuts since a peak in Oc­to­ber, but more will come, says mar­ket an­a­lyst David Lewis of Mil­ford As­set man­age­ment.

“Part of the rea­son that the price got so high was con­cerns about sanc­tions on Iran and a re­duc­tion of sup­ply out of Iran,” he said.

“Then more re­cently we’ve seen Trump en­cour­ag­ing Saudi Ara­bia to con­tinue pro­duc­ing at a higher level to try and keep that oil price down.”

Af­ter the OPEC meet­ing, Saudi En­ergy Minister Khalid Al-Falih said he wasn’t con­fi­dent of an agree­ment af­ter dis­cus­sions of a 1 mil­lion-bar­rel-a-day out­put re­duc­tion con­cluded un­re­solved.

That left the mar­ket dan­gling in un­cer­tainty al­though non-OPEC al­lies were last night to join for a sec­ond day of talks.

Saudi Ara­bia, the largest pro­ducer in the car­tel, is seek­ing to walk a fine line be­tween pre­vent­ing a sur­plus and ap­peas­ing Pres­i­dent Don­ald Trump.

While min­is­ters met in OPEC’s Vienna head­quar­ters on Wed­nes­day, Trump tweeted that the “world does not want to see, or need, higher oil prices!”

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