Oil prices jumped above $70 dollars a barrel for the first time yesterday as Hurricane Katrina caused oil production facilities to shut down.
The higher level is certain to put further pressure on the cost of petrol, with the average monthly fuel bill for UK motorists already nearing £100.
Even before Hurricane Katrina bore down on New Orleans with 155mph winds, oil prices, which later in the day edged back slightly, were under pressure from supply fears ahead of the winter.
The Gulf of Mexico normally produces 1.5 million barrels of crude oil a day, or about a quarter of the United States' domestic output.
Nevertheless there is at least some good news for motorists closer to home as car prices in the UK decline.
According to accountants PricewaterhouseCoopers and eurocarprice.com, average UK car prices have dropped by 0.9 per cent over the last 12 months.
While the UK and the Czech Republic experience car price falls, the rest of Europe has seen a 4.5 per cent increase on average over the last year, fuelled by a boom in diesel cars sales.
Chris Hibbs, UK automotive leader at PwC, based in the Midlands, said: "UK car buyers are currently in a very advantageous position. However, diesel sales now account for approximately a third of new car sales in the UK, so we will have to watch closely to see if a preference for diesel increases here, which would push average prices up."
According to the firm's European New Car Price Index - a volume-weighted measure of relative new car prices - the most expensive car market in Europe is Denmark where new car prices are 94 per cent higher than the euro zone average. The least expensive is Czech Republic, at eight per cent below average.