The upward trend continues as pump prices reach a new record

In a week where retail fuel prices hit a new record with the average cost of diesel breaking £1.92 per litre and a fuel station located within central London selling diesel for a staggering £2.50 per litre. A third consecutive week of price rises is on the way, creating more headwinds in the battle to control inflationary pressures.

In line with global economic backdrop, oil prices have rallied on the back of increased demand as the world restarts following the COVID-19 pandemic. Supply disruption due to the sanctions placed on Russian oil imports and a weak pound against the dollar, (the dollar being the currency in which oil is traded in) creating the perfect storm for fuel prices and adding to the upward momentum driving inflation.

Furthermore, the investment bank UBS has raised its Brent forecasts because of the tightness, citing "low oil inventories, dwindling spare capacity, and the risk of supply growth lagging demand growth over the coming months”. The bank has forecast prices of $130 a barrel by the end of third quarter which could mean further price rises remain likely. However, following OPECs recent pledge to ramp up production oil price the level of price increases suffered over recent may soften, we live in hope!

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