Oil broke through the €80 barrier earlier this week due to geopolitical tensions, but is now well below that. The market is still waiting with bated breath for Israel's counterattack on Iran, which may target oil refineries, but on the other hand there is also hope for a ceasefire between Hezbollah and Israel. In addition, low demand and larger inventories continue to keep the price in check. According to the American government agency EIA, oil will therefore be cheaper on average next year than this year.
Last Monday (September 30), Brent crude was trading at $71,77 per barrel. After that, Iran launched an airstrike on Israel in retaliation for the country’s attacks on the Iranian-backed terrorist group Hezbollah in Lebanon, and the price of oil started to rise. On October 7, oil broke through the $80 per barrel mark, a number that hadn’t happened since August 26. Since then, however, the Brent benchmark has been on the decline again. At the time of writing (Wednesday afternoon, October 9), it stands at $77,69.
On Friday, October 4, US President Biden urged Israel in a press conference to find “alternatives” to bombing oil facilities in retaliation for the XNUMX rockets Tehran fired at Israel. This followed earlier comments by him that Israel was considering an attack on Iranian oil facilities, which gave oil prices an extra boost.
So far, there has been no revenge action on Iran and the oil market has calmed down somewhat, although it seems the question is not whether there will be a major counteroffensive soon, but when. On the other hand, there are cautiously positive signals. For example, a Hezbollah leader has said he supports talks on a ceasefire with Israel that are being conducted under the leadership of Lebanon.
US oil inventory rises
Lack of demand from weaker-than-expected economies in both the US and China is nevertheless keeping oil prices relatively low. On Tuesday (October 8), the weekly report from the America Petroleum Institute (API) showed that US oil inventories rose by 11 million barrels, much larger than expected.
The US Energy Information Administration (EIA) has revised its forecast for the average Brent oil price in 2025 downwards by $7 to $78 per barrel due to lower growth in oil demand. This means that the expected oil price next year is lower than this year, as the average price for 2024 is estimated at $81 per barrel. In 2023 this was $82 per barrel and in 2022 $101. The forecast for 2025 does assume that OPEC+ will increase oil production in mid-2025 as announced.
Diesel price
The price of diesel continues to rise. From €120,69 per 100 litres last week to €123,25 per 100 litres.