CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Petrol prices drop to 4 year low

Article By: ,  Financial Analyst
October 9, 2014 11:45 AM

Pessimism is continuing across the oil sector and more global uncertainty affects prices.

For consumers this could be seen as positive news as petrol prices drop to their lowest level in four years but for investors it is a much different story. Brent crude oil fell to a 27-month low at $90.76 (£55.99) earlier in the month, representing a drop of over 20 per cent from the high of $115.06, recorded in June, the Independent reports.

The International Monetary Fund explained that a stalling European economy and emerging market rises could see this trend continue. US shale gas has enjoyed a major boom but this has placed an increased burden on oil prices as they fell substantially since the summer months.

In early October, Saudi Arabia's decision to cut its official selling price resulted in global oil price dropping to a two-year low. Both Brent crude and US light crude were both down with the latter falling below $90 for the first time in 17 months. The Arab nation took the decision to cut its selling price to protect its market share and provide a more competitive pricing market.

While investors will be concerned of when there will be an upturn in oil prices, motorists will be pleased the cost of petrol come tumbling down. According to the AA motoring organisation, the average cost of a litre of petrol fell to 127.13p on Monday (October 6th), providing a significant boost to car owners.

It represented the lowest level since January 2011 when the government increased VAT to 20 per cent. Supermarkets such as Tesco and Sainsbury's slashed 5p per litre off petrol while Asda also introduced price reductions.

Speaking to the news provider, an AA spokesman said: "It may be a false dawn to say low prices will be around for a while but we should enjoy it while it is there. Arguably the forecourts should do more. Where there is an opportunity to increase margin they will."

Find out about commodities trading and learn CFD strategies at City Index

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024