Oil Price rise: UK motorists rage as oil hits £77 a barrel

Russian state TV host taunts Europe over high gas and oil prices

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It will be another blow for the long suffering UK motorists who are still struggling with high prices at the pumps despite a general fall in oil prices. Brent crude settled $1.31(£1.09), or 1.42 percent higher at $93.65(£77.79) per barrel.

US West Texas Intermediate (WTI) crude rose $1.58 (£1.31), or 1.8 percent, to $88.11(£73.19) per barrel.

Prices rose because of increasing concerns about the decrease in US supplies which is increasingly making investors nervous.

According to data from the Energy Information Administration (EIA) U.S. crude stocks fell by 7.1 million barrels to 425 million barrels in the week to August 12.

This compared to a 275,000 barrel drop predicted by analysts in a Reuters poll.

In contrast US exports are extremely healthy as EIA data shows 5 million barrels a day are exported, the highest on record.

WTI has traded at a steep discount to Brent, therefore making purchases of US crude more attractive to foreign buyers.

As US supply has decreased the demand from foreign buyers has increased making oil a relatively scarcity and pushing prices up.

A sign of the strong demand is the fact that gasoline stocks drew 4.6 million barrels, a much higher figure than the predicted 1.1 million barrels. 

Phil Flynn, an analyst at Price Futures group said that some of the issues facing the market appear to have been “alleviated” to some extent.

He said: “It was expected to be a friendly report and it was pretty much across the board.

“Some of those demand destruction concerns that the market was going through seem to be alleviated a little bit.”

Oil prices soared to very high levels following the start of the war in Ukraine in February reaching the almost unprecedented price of $147(£122) in March. 

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This was largely because investors were very concerned about supply issues from Russia.

However despite sanctions Moscow has started to increase oil production and Asian buyers have increased their purchases.

According to an economy ministry document seen by Reuters Moscow has raised its forecasts for output and exports.

Russia’s earnings from energy exports are forecast to rise by 38 percent this year according to the document, partly due to higher oil export volume.

It is a sign that Moscow has not experienced the supply issues that the markets had originally expected.

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