Supermarkets cut petrol prices after global oil market weakens

(c) Sky News 2017: <a href="">Supermarkets cut petrol prices after global oil market weakens</a>

Three supermarkets have said they are cutting fuel prices - following a sharp fall in the global oil price over the last week.

Asda said it was dropping the price of fuel by up to 2p per litre capping unleaded at 114.7p and diesel at 116.7p at 301 filling stations.

Morrisons - with 333 sites - and Tesco (Swiss: TSCO.SW - news) - with 500 petrol stations - said they were also cutting fuel prices by up to 2p per litre.

Sainsbury (Amsterdam: SJ6.AS - news) 's did not announce any changes but said its position remained "under review… with a view to remaining competitive".

Rising prices at forecourts have been pushing inflation higher - helping it reach its highest level since June 2014 at the start of this year.

Signs of a fall will provide some relief for consumers who have seen prices elsewhere pushed higher by the collapse in the value of the pound, which makes imported goods more expensive.

The supermarket announcements come after a sharp fall in the cost of a barrel of Brent crude on world oil markets, from over $56 last week to around $51 this week.

The oil price had been lifted in recent months thanks to an agreement by the main Saudi-led bloc of oil-producing countries to restrict production.

But there are now fears that with the US still pumping out high levels of fuel, global markets remain over-supplied.

RAC (Taiwan OTC: 2237.TWO - news) fuel spokesman Simon Williams said: "While this cut may come as a surprise to drivers as prices at the pump have been going the wrong way for months, it is has been on the cards for a couple of weeks.

"This price cut was made possible by the fact the oil price has dipped in the last two days of trading, reaching its lowest in nearly four months on news that the US has record crude supplies.

"Before that the OPEC oil producing countries cuts had been sending fuel prices up."