US oil export boom sinks petrol prices
MOTORISTS look set to benefit from low fuel prices this summer as an American fracking boom sinks the cost of oil.
In a boost for families across the UK, motoring groups predicted further falls in the price of petrol and diesel, particularly if the supermarkets unleash a new price war at the pumps to win customers.
The predictions came as analysts at Goldman Sachs said oil could slump below $40 a barrel unless members of the global cartel Opec launch ‘shock and awe’ tactics to prop up prices.
Brent crude was trading at $47.57 a barrel last night having been above $57 early this year and around $115 in mid2014. Attempts by Opec such as Saudi Arabia, Iraq and Libya to support prices by limiting production have been undermined by soaring output in the US. Consultancy PIRA Energy said it expects the US to quadruple oil exports within three years on the back of a fracking revolution.
It said that by 2020 exports of US crude would reach 2.25m barrels a day – more than Opec members such as Venezuela, Nigeria and Kuwait managed last year.
‘The US will become one of the top ten exporters in the world,’ said Gary Ross, global head of oil at PIRA. ‘This is very bad news for Opec.’
US oil production has risen 10pc in the last 12 months to 9.3m barrels a day while figures from the International Energy Agency show investment in the US shale industry has jumped 53pc this year.
US oil exports have soared to markets such as Europe and China since Barack Obama eased restrictions on the sale of Ameri- can crude overseas. Members of Donald Trump’s administration now say they do not just want the US to become ‘energy independent’ but also ‘energy dominant’.
The slide in the oil price has already eased pressure on family finances in Britain by bringing down the cost of fuel. The RAC said the average price of a litre of unleaded has fallen from 120p in February to 114p today while diesel is down from 122p to 115p.
This means a tank of petrol is around £3 cheaper than it was in February and diesel is £ 3.50 cheaper, the group said.
RAC spokesman Simon Williams said if the shale boom in the US leads to further falls in the oil price ‘then motorists in the UK can look forward to sustained low prices at the pumps and potentially further price cuts later in the year and into 2018’.
AA spokesman Luke Bosdet said: ‘ We would expect to see cheaper oil work its way through to the pumps.’
Hydraulic fracturing, or fracking, is a technique designed to recover gas and oil from shale rock and has taken off in the US.
Britain has lagged behind amid fierce opposition from environmental groups and protesters.
But preparation work is now under way at sites across the country including in Yorkshire and Lancashire.
Ken Cronin, chief executive of UKOOG, which represents the UK onshore oil and gas industry, said: ‘We are on the cusp now and have sites around the country that are just about to start.’