This is very good news for car drivers, businesses, farmers and homeowners in Northumberland as a car or oil fired heating are necessities for so many here - not luxuries. I continue to apply pressure on the oil companies to pass on the reduction in cost to the consumer at the pumps, but there is no doubt heating oil, and petrol for the car are much cheaper than they were a year, 2 or particularly 3 years ago. A slump in prices to levels around $40 per barrel of oil would be a boost for the UK economy and could see petrol prices drop close to £1 per litre providing relief to motorists. I recently met with many of the heating oil buying clubs and I am pleased to see that the minimum delivery price has dropped below £300.
The interesting question is why does the price keep falling? The key change is the impact of shale gas: it has made the USA energy independent and not an importer of foreign oil. At the same time there is the impact of sanctions on Russia, and the decisions of the OPEC Sheikhs. However, this will impact on the North East and Scotland as North Sea Oil and Gas will be affected in its margins and profitability. In that context I am pleased that the Infrastructure Bill is progressing as this will implement much of the Wood Review to assist our Oil and Gas producers and suppliers.
The papers examine this story in detail here: http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/11292837/Opec-willing-to-push-oil-price-to-40-says-Gulf-oil-minister.html