Oil price slump: Joy for UK motorists as oil falls to £78 a barrel

U.S. West Texas Intermediate crude (WTI) settled at $1.65 (£1.37) or 1.7 percent, lower at $94.70 (£78.89) a barrel. Meanwhile Brent crude futures fell 66 cents (£0.55) or 0.6 percent, to $103.20 (£85.97).

It is the first time US crude prices settled below $95 (£79.14) a barrel since April.

WTI closed lower for the third straight week amongst evidence that falling demand in the US is impacting the price of oil.

Data has shown that US gasoline demand had dropped nearly 8 percent from a year earlier hit by rising prices at the pumps.

However, in contrast, there are signs of strong demand in Asia propping up the Brent benchmark, which settled higher for the first time in six weeks.

He said: “Perceptions are growing that the US and EU will implement price caps on Russian oil by year end.

“Past history shows that government-induced price caps on commodities are usually short lived and can result in exaggerated prices soon after.”

However prices increases have yet to occur as concerns about supply fade due to an increase in production in the Middle East and the US.

Libya’s oil production is at more than 800,000 barrels per day (bpd) and will reach 1.2 million bpd by next month, the Libyan oil ministry has claimed.

Iraq has the potential to increase its oil production by 200,000 bpd this year if asked, an executive of Iraq’s Basra Oil Co said.

According to data from energy services firm Baker Hughes there are 599 operational oil rigs in the US, an indication of predicted future outputs.

Increased production is likely to prevent a price rise as anxiety from investors about supply issues caused by the war in Ukraine fades.

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