LONDON — The lowest oil price in four years will provide stimulus of as much as $1.1 trillion (U.S.) to global economies by lowering the cost of fuels and other commodities, according to Citigroup Inc.

Brent, the world’s most active crude contract, closed at $83.78 (U.S.) a barrel in London Wednesday. That’s more than 20 per cent below its average for the past three years, amounting to savings of about $1.8 billion a day based on current output, Citigroup estimates. Savings will climb to $1.1 trillion annually as the slide cuts costs of other commodities, leaving consumers and companies with extra cash to spend and bolstering growth, according to Ed Morse, the bank’s head of global commodities research in New York.

Crude prices are plunging amid signs that OPEC, supplier of 40 per cent of the world’s oil, won’t act to eliminate a surplus as global growth slows. Combined supplies from the U.S. and Canada rose last year to the highest since at least 1965 as producers tapped stores locked in shale-rock formations and oil sands. The global economy will rebound next year, with growth quickening to 2.98 per cent, the fastest since 2010, according to analyst forecasts compiled by Bloomberg.

“A reduction in oil prices also results in a reduction in prices across commodities, starting with natural gas, but also including copper, steel, and agriculture,” Morse said yesterday in an e-mailed response to questions. “All commodities are energy intensive to one degree or another.”

Regular gasoline averaged nationwide in the U.S. dropped to $3.163 a gallon, the lowest in more than three-and-a-half years, Heathrow, Florida-based motoring group AAA said on its website Wednesday. The Bloomberg Commodity Index slumped to a five-year low, about 50 per cent below its peak in July 2008. Copper, natural gas, coal and iron ore are all far below their peaks.

“Cheaper oil is an advantage for both consumers as well as industrial and manufacturing operations, especially as winter approaches,” Myrto Sokou, an analyst at Sucden Financial Ltd. in London, said by e-mail yesterday.

As lower energy prices help reduce commodity costs, they can push down the inflation rate. While freeing up more money for consumers, outsized declines could become a concern in places like Europe, where policy makers are trying to stave off deflation, which can exacerbate an economic slump.

The euro area will have inflation of 0.5 per cent this year, according to estimates compiled by Bloomberg. Consumer prices globally will increase by 2.47 per cent in 2014, about the same as last year, the forecasts show.

“Lower prices, for most economies, reduce the cost of doing business and support economic growth,” the International Energy Agency said in a report Oct. 14. “Lower prices offer a cushion of sorts against an otherwise vulnerable macroeconomic backdrop.”

The Paris-based adviser to governments said in the same report that oil demand will expand by about 650,000 barrels a day this year, half the pace it anticipated in July.

Nations in the Organization of Petroleum Exporting Countries may resist cutting output in response to the slowing demand growth to try and test the prices at which some North American supply is profitable, Antoine Halff, head of the IEA’s oil industry and markets division, said.

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A decline to $80 (U.S.) would cost OPEC $200 billion of its recent earnings of $1 trillion, Morse said in an analysis on the topic that was published yesterday in the Financial Times.

Oil prices rose to a record in 2008, boosting revenues for nations including Russia as well as Middle East states such as Saudi Arabia, Kuwait and the United Arab Emirates. It also increased prices for consumers in industrialized nations.

“It is a big chunk of stimulus,” Seth Kleinman, Citigroup’s head of European energy research, said by phone from London. “The macro economic analysis of higher oil prices was always that it is essentially a wealth transfer from leveraged spending U.S. consumers to saving Middle East sovereigns, so ultimately it reduces the global velocity of money significantly and it’s a net drag. Now a price fall reverses that.”