Response to rising oil price
United States ramps up oil production
The oil price has not been as high as it is now since 2014. That may soon change, as the United States (US) significantly increases oil production.
The fact that the oil price has been rising since June 2017 has everything to do with the increasing demand for oil. Emerging industrialized countries such as China and India are driving this demand up. The supply of oil is also limited, because oil reserves are difficult to find at the moment. As a result, the oil price (Brent) fluctuates around $70 per barrel, a level that has not been reached since 2014.
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Oil price rose to highest level since late 2014
Increased production in US
A bright spot in the oil market could be that the US is ramping up production. This is in response to the increased oil price. The United States can extract more than 10 million barrels of oil from the ground every day this year, leaving Saudi Arabia and Russia behind, according to the International Energy Agency (IEA). The agency predicts a record year for the US, and considers it possible that the US will become the world's largest oil producer this year.
Little movement of diesel prices
For diesel prices, the crude oil price does not directly determine the pump price, because approximately 2/3 of this consists (in the case of diesel) of taxes. The average price for diesel currently stands at €1,290 per litre, it reports CBS.
This represents an increase of 4,5% compared to the €1,235 per liter recorded in January last year. The fact that this increase is not as strong as the rising oil price has to do with the strong euro exchange rate.
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Anne-Jan Doorn
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