Oil prices continue to drop

Supermarkets have dropped the pump price for petrol and diesel.

On Thursday (August 27th), Morrisons and Sainsbury's both slashed 2p from the price of unleaded petrol and 1p off the cost of diesel.

This is the second time in a week that Morrisons has cut the price of unleaded – and the fourth time in six weeks that diesel has been marked down. It's now 23p cheaper per litre than it was this time last year.

Services director at Morrisons Jamie Winter, said the drop in the pump prices was due to the price of crude falling on the world market.

"That, combined with a relatively strong pound, is helping us to pass savings back to motorists," he added.

The RAC commented that the drop in petrol prices was not a surprise, since crude is trading at its lowest level since March 2009.

RAC Foundation director Steve Gooding said he believed that more cuts could be in the near future.

"This raises further the tantalising prospect that at least some of the nation's 37 million motorists might soon be getting change from a quid when they buy a litre of fuel," he said.

On Wednesday, the price of Brent North Sea oil was trading at $43 (£28) a barrel. This is nearly 60 per cent lower than during the same period last year. The drop in price is credited to increased production in the US and Iraq. The stagnant global market has also led to a drop in demand.

Bad news for the North Sea oil industry

While the pump prices for petrol is good news for motorists – especially those planning to get out of town over the bank holiday weekend – the outlook isn't as optimistic for the North Sea oil industry.

Thousands of jobs have been cut in Aberdeen – large oil companies like shell are working to reduce their budgets in line with falling income, reports the Guardian.

In addition, Danish Maersk Oil has warned that 200 jobs could be cut and its Janice platform closed down. The 7,000-barrel-a-day facility is located 175 miles south-east of Aberdeen and the company has said it will ask Britain's Oil and Gas Authority for permission to stop production during the second or third quarter of 2016.