OIL PRICES SURGE ABOVE 100 DOLLARS AS GAS BILLS FACE WINTER RISE

Brent crude oil rose nearly 3% to around 100.50 dollars a barrel on Wednesday afternoon, driven by attacks on Iranian oil tankers and concerns over supply disruptions amid Middle East fighting. US officials reported on Tuesday that multiple tankers had been struck in retaliation for attempted missile attacks on a Navy warship. The last time oil prices exceeded 100 dollars a barrel was in late July. Energy experts have warned that households face further increases to energy bills as a result of these price movements.

UK natural gas prices reached their highest level since December 2022, rising approximately 3% to around 195p per therm. Petrol prices have increased by 5p a litre over the past week to 167.17p, whilst diesel has risen by the same amount to 188.63p, according to data from the RAC; these petrol prices represent the highest level in four years. According to data cited by analysts, UK gas prices have more than doubled since the start of the year. Britain remains heavily dependent on seaborne liquefied natural gas imports, as the country stores little of its own supply and relies substantially on gas for heating and power generation.

Ofgem's energy price cap will rise by 4% in October, with analysts predicting a larger increase in January. Andrew Goodwin, chief UK economist for Oxford Economics, forecast the price cap could rise by a further 13% in January, stating that wholesale prices currently exceed levels recorded in the previous observation window and are expected to remain elevated in the near term. Simon Francis, coordinator of the End Fuel Poverty Coalition, noted that wholesale gas costs have reached their highest point since December 2022.