The oil price has fallen by as much as 9% this week. A possible end to the Russian ban on diesel exports and very low American demand for gasoline are putting pressure on oil prices. It is striking that diesel has not become cheaper despite the possible expiration of Russian export restrictions.
The oil price fell 9% this week. A possible end to the Russian ban on diesel exports and very low American demand for gasoline are putting pressure on oil prices. It is striking that diesel has not become cheaper despite the possible expiration of Russian export restrictions.
The oil price has taken a big step downwards this week. On September 28, Brent crude was trading at €93,10 per barrel. Thereafter, the oil price fell consistently until October 4 to €85,81 per barrel.
The upward sentiment of August and September has clearly been broken. The market expected oil consumption in China and the United States to rise, while the OPEC oil cartel kept supply low. Saudi Arabia and Russia went even further, with lower targets for their own oil production of a total of 1,3 million barrels per day. Analysts predicted that oil prices were on the rise to well above $100 per barrel, but the rally appears to have been brutally disrupted. Since the peak of €94,36 on Wednesday, September 27, the price of oil has fallen by more than 9%. This means that most of the September increase has been canceled out in one fell swoop
American malaise prevails
There was clear pressure on the oil price all week. The main reason for this was the fear of a drop in demand. The undertone of the oil market has been quite negative over the last week. Investors are currently emphasizing the slow economy and high interest rates. In addition, there are concerns about the expiration of the export ban on Russian diesel. Last month, Russia decided to stop oil exports. The purpose behind this is to stabilize domestic prices. The high oil and diesel prices make it more attractive for Russian producers to sell their diesel abroad. This created a shortage on the domestic market. Because Russia has not yet extended the export ban, rumors have arisen that the restrictions will be lifted.
The decline was strongest on Thursday, October 4. That day, the Brent benchmark lost as much as 5% of its value. Data from the US Energy Agency (EIA) shows that demand for gasoline in the United States is at its lowest since 1998. Despite the spike in routine maintenance of US oil networks, inventories are still growing. The OPEC countries still emphasize that oil demand is high and could grow sharply at any time.
This immediately averted a risk to American oil production. Last week, the oil price rose after it emerged that surcharges at the important Cushing junction were close to the critical minimum. For eight weeks in a row, stored volumes fell to 23 million barrels. There is a risk in this, because if stocks fall below 20 million barrels, there is a strong chance of impurities. Due to the weaker sentiment, stocks have strengthened considerably. Stocks increased by 6,5 million barrels this week.
The price of diesel is not falling along with the Brent benchmark. On Thursday, September 28, oil traded at 146,63 per 100 liters. Until Tuesday, October 2, the price rose slightly to €147,06. Then the price dropped. On Tuesday, October 4, €100 was paid for 144,17 liters of diesel.