Volatile trading pushed the price of crude oil back below US$100 a barrel this week, offering motorists hope of cheaper fuel.
October crude dropped $1.41 to $98.93 on Wednesday, as slowing demand offset oil cartel Opec’s decision to cut supply.
At a meeting on Wednesday, Opec’s 13 member countries – including Saudi Arabia, Iran, Venezuela and Nigeria – effectively agreed to cut excess oil production by 520,000 barrels a day.
Opec members regularly produce excess oil to maximise revenues, but the new deal aims to prevent oil prices from falling too far.
It is feared rapid price drops would cause problems for oil industry investment.
The New York crude oil price has dropped by almost 30% since July’s $147 dollar-high as projections of slower global economic growth continue to dampen demand.
But the price of petrol on UK forecourts has not fallen as quickly as the cost of oil.
The average cost of a litre of unleaded fell from a 119.7p peak in July to 112.7p at the weekend – a drop of nearly 6%.
Over the same period diesel prices fell from 133.3p to 124.1p, a reduction of just under 7%.
The AA said it takes around four to six weeks for oil price changes to filter through to forecourt pumps.
But last week AA president Edmund King said earlier cuts in the cost of oil had not been passed on to drivers.
He told ITV news: ‘Oil companies have been quite slow in passing it on to the consumer. By our calculations we estimate the price at the pump should be two pence less than it is at the moment.’