Petrol and heating costs are already starting to surge in price, with Brent crude rising above US$58 for the first time since 2015 following Harvey hitting the Gulf Coast. This spells bad news for motorists and heating costs as winter approaches.
So why is this happing?
The Texan Gulf Coast, which was hit during Harvey, hosts 20 percent of the of the world’s refinery capacity, and without the ability the refine the oil to Petrol, the demand has become a strain on the supply.
There is also issue of the Turkish president Recep Tayyip Erdogan threatening to cut off the pipeline carrying oil to Northern Iraq. This comes as Iraqi Kurdistan are about to have a landmark referendum on independence. Iraq however do not recognise the referendum and has called on all foreign countries to stop buying Kurdish oil.
‘If this boycott call proves successful, a good 500,000 fewer barrels of crude oil per day would reach the market,’ – Commerzbank said in a note.
Meanwhile, Opec, Russia and several other producers have cut production by about 1.8 million barrels per day (bpd) since the start of 2017, helping oil prices rise by about 15% in the past three months.
So, what does this mean for the UK?
Well your overheads are about to increase, prices rose by 7p per litre, with petrol prices now hovering around £1.20. Motoring groups are accusing petrol stations of “Feather and rocket” tactics. When the price per barrel is high the price per litre rises rapidly, however once the price per barrel drops, petrol stations are very gradual in the lowering of prices.
And with winter fast approaching, and our radiators staring to rattle again, this could have a detrimental effect on our already increasing heating bills.