Oil prices rise to hit four-year high of $70 a barrel

The price of oil has hit $70 a barrel for the first time since December 2014.

Brent crude climbed after members of Opec, the cartel of 14 oil-producing nations that accounts for 40% of the world's output, said it would continue to limit supplies.

The RAC, the motoring group, has warned that rising oil prices could lead to higher forecourt costs for motorists.

However, the AA said that drivers would benefit if supermarkets resumed their petrol price war.

Suhail al-Mazrouei, the UAE oil minister and Opec president, said it was committed to limiting output until the end of the year.

Last year, Opec and other nations including Russia said they would extend a deal to cut production to help support oil prices that had fallen below $50 a barrel when the agreement was struck in 2016.

Thursday's rise was also bolstered by a surprise fall in US oil stockpiles.

The US Energy Information Administration on said crude inventories fell by almost five million barrels to 419.5 million barrels in the week to 5 January. US production also fell by 290,000 barrels per day to 9.5 million.

US oil also rose 1.5% to $64.51 a barrel.

The RAC said that rising oil prices were likely to have "a knock-on effect in the forecourt due to the increase causing the wholesale price of fuel to rise".

The price of unleaded petrol has already risen by nearly 5p since November to 121.27p per litre, while diesel prices have jumped 3p to 123.97p over the same period.

It said that cost of filling an average 55-litre family car was now £66.69 for petrol and £68.18 for diesel.

An RAC spokesman said: "If oil stays at this level, pump price hikes will be almost inevitable.

"With households across the country still feeling the cost of Christmas this is not the start to 2018 anyone would have wanted. It could also negatively affect business and further fuel inflation."

But the AA said: "Oil at $70 a barrel has yet to threaten a pump price surge on UK forecourts."

An AA spokesman said petrol prices had risen in recent weeks after supermarkets put their fuel price war on hold.

According to data from the AA, supermarkets lowered petrol prices several times last year to a low of 111.8p a litre in July.

While the AA conceded that wholesale prices have risen, it added: "The current higher prices are more a reflection of reduced fuel price competition at supermarkets."

By December, petrol was an average of 117.6p a litre at supermarkets and 121.9p ea litre at other outlets.