Manchester City fans will be weeping quietly into their beer over the continuing slide in the price of crude oil. As each day passes and oil cheapens by another dollar, the boast by the club’s new Abu Dhabi owners of a £500 million budget for player transfers begins to look less certain.

Supporters of rival teams and those less footie-obsessed will begin to feel some relief in their pockets quite soon. The crude oil price is gently tumbling as the economy slows. “Demand destruction” is hard at work in the United States where motorists are driving less. US fuel consumption declined by almost 900,000 barrels per day in July but this gradual oil price slide doesn’t yet look like a crash. Stocks of oil in Western consuming countries are not rising, suggesting there is no emerging glut and little reason for a collapse.

In energy terms we are not out of the woods but we may enjoy a respite as we move into the autumn. Lower oil prices should mean lower gas prices because across most of Europe, natural gas is priced according to indices based on oil products. Cheaper gas should, in turn, mean lower electricity prices, in the absence of a harsh winter.

Reason for relief but not rousing cheers because the pound in your pocket is shrinking in value and that makes a lot of things more expensive. Sterling in the shredder doesn’t just ruin your winter holiday plans but it increases the cost of things we buy abroad where almost everything is priced in dollars if it isn’t priced in euros.

Oil is priced in dollars and the petrol pump price doesn’t just reflect the rise and fall of crude oil. What you pay to fill your tank reflects the cost in debunked sterling of buying petrol sold at a dollar price by a refiner. Add to that fuel taxes which represent almost 70 per cent of the headline price.

If energy is what gets people angry, it’s not the biggest household bill. Road fuel is just 4 per cent of an average budget while food is 11 per cent and inflation in the cost of our dinner is running at double digit rates. Half of what we eat is imported so the crimping of the pound is again eroding our purchasing power over imported fruit and vegetables, making more expensive many of the items the government would like to see on the menu.

Still, there is good news — the massive surge in basic foodstuffs, such as wheat and corn, has subsided. Wheat prices have fallen by 40 per cent from their peak and that will eventually ease the pressure on farmers who are now pushing through hefty price increases in an effort to pass on the burden of last year’s rise in animal feed, fertiliser and fuel.

That brings us back to the price of oil. Opec meets in Vienna next week and the cartel members are nervous about the fall in crude. Behind the scenes, Saudi Arabia has been pushing up the price of Arab Heavy, its cheapest grade, in a bid to reduce volumes. Opec has become used to $100 per barrel oil. No one expects a cut in Opec output next week, but it could come before Christmas if the price fall continues. This cartel feels stronger than ever and no one should expect very cheap energy to come round again.

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