Oil price surge: UK motorists erupt with fury as oil hits £88 a barrel

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With Boris Johnson’s resignation likely to lead to a political vacuum the agony at the pumps is set to continue. There has also been concern that the 5p cut in fuel duty announced in the then Chancellor Rishi Sunak’ spring statement has not been passed on to motorists by retailers.

Brent crude futures rose $2.37 (£1.97), or 2.3 percent, to settle at $107.02(£88.96) a barrel on Friday.

West Texas Intermediate crude rose $2.06 (£1.71), or two percent, to settle at $104.79(£87.11) a barrel.

However Brent posted a weekly decline of about 4.1 percent and WTI a loss of 3.4 percent, following on from the first monthly decline since November.

Prices crashed on Tuesday, when Brent’s $10.73 (£8.92) drop was the contract’s third-biggest daily fall since it started trading in 1988.

This partial weekly decline was influenced by worries amongst investors concerned about the possibility of a recession that would hit demand.

With central banks across the world raising interest rates in order to control inflation there are also concerns that rising borrowing costs could hit growth.

US economic data showed a better than expected performance in terms of job creation which could potentially lead to a surge in demand and therefore a rise in oil prices.

However Phil Flynn, analyst at Price Futures Group said this could be a “double -edged” sword from the point of view of the industry. 

He said: “The oil market is looking at the jobs report as a double-edged sword.

“The jobs number was positive from a demand perspective.

“On the bearish side, the market is concerned that if the jobs market is strong, the Fed can be more aggressive with raising rates.”

U.S. energy firms this week added two oil rigs, bringing the total to 597, highest since March 2020, according to Baker Hughes Co . 

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Oil prices soared in the first half of 2022 particularly following the Russian invasion of Ukraine as investors became concerned about supply issues.

Brent hit a high of $147( £122) following the invasion.

Stephen Brennock from oil broker PVM said despite economic concerns the market was still “bullish”.

He said: “Economic worries may have roiled oil prices this week, but the market is still flashing bullish signals.

“This is because supply tightness is more likely to intensify from this point than to ease.”

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