Oil prices edge slightly higher after sinking to a five-year low on Wednesday. As the decision by OPEC not to cut output plays out in the markets, Ciara Lee looks at the lag in lower prices for European consumers.
The slippery slope seems to be getting steeper. Brent crude prices are going up as well as down - but they don't seem to be moving much above a five-year low. A U.S. shale boom has fuelled a supply surplus. And OPEC expects demand in 2015 to fall to its lowest level in more than a decade. (SOUNDBITE) (English) REUTERS REPORTER, CIARA LEE, SAYING: "Brent crude has dropped more than 40 percent since June and OPEC is resisting cutting output. But here in Europe political pressure is mounting for lower prices at the pump to help boost consumer spending." UK consumers have good reason to moan - prices have fallen just 6 percent in the past six months. (SOUNDBITE) (English) UK PETROL CONSUMER, SAYING: "I think they are making a bit too much profit off us. Off all the other taxes as well. Even though they are heavily taxing the petrol stations, it's about time we saw some of those cost prices as well." (SOUNDBITE) (English) UK PETROL CONSUMER, SAYING: "Petrol companies have been ripping us off for a long time and we all know it." The European Commission says price reductions for most of its consumers are less than half the fall in wholesale fuel prices. But Neil Atkinson from Lloyds List Intelligence says that's to be expected. (SOUNDBITE) (English) HEAD OF ANALYSIS AT LLOYDS LIST INTELLIGENCE, SAYING: "It takes time of course for the lower prices for crude and more importantly the products which are produced by refining crude, it takes time for those prices to feed their way through into the market. Because refiners and holders of product stocks tend to run down their higher price inventories first, and replace those inventories with cheaper stock." Pump prices in the U.S. respond almost immediately, thanks to more competition and lower taxes. It's good for the global economy in many ways but will OPEC crack and cut output any time soon? Craig Erlam is from Alpari (SOUNDBITE) (English) MARKET ANALYST AT ALPARI, CRAIG ERLAM, SAYING: "There seems to be this tug of war and no one seems to be easing up at this stage. I think the Saudi's have the potential to go on for longer, it's whether other members of OPEC whose production costs are not quite as low as the Saudis, this is going to be the fight of who has the most influence." The next OPEC meeting isn't due to take place until June. But if crude prices continue to fall an emergency one may be called. By then perhaps the price at the pumps may have fallen a little closer to the one the retailers get.