Oil prices have continued to fall this past week, thanks to new lower forecasts for global oil demand and a sort of pledge from Israel to leave Iranian oil refineries alone in the event of a retaliatory attack on the country.
A week ago (October 10), Brent crude was trading at €79,40 per barrel. At the time of writing (October 16 afternoon), it was trading at €74,18, a decline of 6,6%. Compared to the most recent peak on April 5, when a barrel of Brent cost €91,17, the price has lost almost a fifth.
Both the International Energy Agency (IEA) and oil cartel OPEC released forecasts this week. In its new oil market report from October, the IEA predicts that there will be a large surplus of oil in the new year, provided there are no major production disruptions. Global demand growth for this year is revised down by 40.000 barrels per day to 860.000 barrels per day. This is mainly due to the disappointing demand for oil from China. In August, demand there fell for the fourth month in a row. In the meantime, oil production in North and South America is increasing significantly, with the US leading the way.
OPEC also revised its oil demand for 2024 downwards in its latest monthly report, down by 106.000 barrels per day from last month to 1,9 million barrels per day (year-on-year). Demand growth in 2025 has also been revised downwards, by 102.000 barrels per day. This brings OPEC’s forecast for next year to 1,6 million barrels per day (year-on-year), or 1,58% growth.
Geopolitical tensions in the Middle East
Fears that Israel had its eye on the country's oil facilities have caused oil prices to rise in recent weeks. Since Iran's Sept. 30 retaliation against Israel for attacks on the Iranian-backed terrorist group Hezbollah in Lebanon, a response has been awaited.
Israeli Prime Minister Benjamin Netanyahu has now told Joe Biden to strike Iranian military targets rather than oil refineries or nuclear facilities, according to the Washington Post. That has caused a sigh of relief in the oil market, although geopolitical tensions in the Middle East continue to support prices in general.
Diesel price
The diesel price remains the same as a week ago at €123,25 per 100 liters.