End of stable low diesel price?

Since mid-March, the price of diesel has stabilized at around 85 cents per litre. But the period of stable low prices may well be over. Oil cartel OPEC and Russia agreed on Thursday to cut oil production.

Daily production will be cut by ten million barrels in May and June to prop up oil prices. This makes it the largest reduction in oil production ever. However, the news of the oil production cut-off – which had been in the air for a long time – led to another oil price fall.

Because the announced restrictions for May and June and to a lesser extent the months thereafter would not outweigh the surplus created by the production increase at the beginning of March and the decreased demand due to the corona crisis. 

Global regulation?
The OPEC countries and Russia hope that other oil-producing countries, including the United States, Canada, Brazil and Norway, will also cut their production. G20 talks today could give the situation new dynamics, but the United States has not yet made any commitments and points out that oil production has also declined due to the corona crisis without measures.

Dive since New Years
At the beginning of this year, Brent oil still cost almost $70 per barrel, after which the price started to fall. OPEC crisis, the ensuing price war and the corona crisis caused a dramatic drop in oil prices to barely $20 dollars. The price of diesel fell along with the collapsed oil price, but less hard.  

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