Oil prices have surged after cartel Opec failed to back an increase in supplies which could have given some respite to UK motorists squeezed by high forecourt costs.

Oil prices fell to four-and-a-half year lows today as investor pessimism over global crude demand outweighed the largest-ever production cut by oil producing cartel Opec.

The FTSE 100 Index fell almost 3% today after investors were spooked by a sudden spike in oil prices and fears over inflation in the UK and US.

Crude oil prices broke through $107 US a barrel to set another record in New York today.

Oil prices touched new highs near $105 a barrel today as the US unveiled a surprise drop in supplies.