Relief for drivers as oil prices fall below $84, marking their biggest weekly decline in more than a year

Oil prices are on track for their biggest weekly decline in more than a year after plunging below $84 a barrel last night.

In another day of turmoil in financial markets, the price of Brent crude fell to as low as $83.84, extending its weekly loss so far to over $11, or 12 percent.

The last time there was a major weekly decline was in August last year.

Oil prices were above $97 a barrel early last week, having risen about 35 percent since June, sparking warnings that the price would rise above $100 again.

The turnaround, including a $5 drop on Wednesday alone, the biggest single-day drop in more than a year, will provide some respite for motorists who have seen fuel prices rise in recent months.

Oil prices: In another day of turmoil in financial markets, Brent crude fell to $83.84, extending its weekly loss so far to over $11, or 12%.

It is also being welcomed at the Bank of England and Downing Street after both Andrew Bailey and Rishi Sunak vowed to get inflation back under control.

“Higher oil prices were one of the reasons for renewed inflation fears,” said Neil Wilson, chief market analyst at Markets.

Oil prices soared last year after Russia invaded Ukraine, driving up inflation and increasing pressure on businesses and households.

But after peaking at nearly $130 a barrel in February 2022, the price was around $70 in June this year.

However, production cuts by Saudi Arabia, Russia and other members of the OPEC+ cartel pushed up the price on hopes that the reopening of China’s economy after lockdown restrictions were lifted would boost demand.

However, after inflation hit $97 last week, fears that inflation could prove persistent fueled fears that interest rates would remain higher than previously expected for some time.

That has driven up borrowing costs – and raised fears about the outlook for the global economy and therefore oil demand.

The UK 30-year bond yield hit a 25-year high this week, while benchmark 10-year bond yields in the UK, US, Germany, France and Italy are at their highest in more than a decade.

This threatens to drive up borrowing costs – and could plunge economies into recession in the process.

Edward Moya, market analyst at trading firm Oanda, said: “This turnaround must frustrate the Saudis.”

“Brent crude oil has fallen over $10 since the end of last month as rising global bond yields have dented global growth prospects.”