Pump in use GettyImages-524036576

Three months of falling pumps prices could shortly be over after the OPEC+ group of oil producing countries – which includes Russia and Saudi Arabia – announced they were cutting production.

After a meeting on Wednesday they announced they would cut production by two million barrels a day – the biggest reduction since the start of the pandemic­­.

Oil prices have fallen from a high in the spring and the group said it wanted to stabilise prices in the face of a global economic slowdown, but the move is expected to lead to higher prices.

Walid Koudmani, chief market analyst at financial brokerage XTB, said crude oil futures were trading at around $88 per barrel on Thursday after gaining more than 10% this week as OPEC+ decided on the cuts.

He added: “While some may have seen this coming, the decision has sparked an upward move for the price which led to it breaking above an important resistance area around $87.60.”

RAC fuel spokesman Simon Williams commented: “Such a deep oil production cut will inevitably see oil prices rise, forcing up the wholesale cost of fuel. The question is when, and to what extent, retailers choose to pass these increased costs on at their forecourts.

“Despite three straight months of pump prices coming down, we believe that in many cases drivers are being charged more to fill up today than they should be based on average wholesale prices over the last few weeks.

“If we see pump prices go up within the next fortnight, we’ll know that retailers are sticking to their strategy of taking far more margin on every litre they sell than they have historically.”