Falling crude oil prices only reach filling stations with a delay
Published: Thursday, Jun 13th 2024, 13:20
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Although the price of crude oil has recently risen again somewhat, it is still significantly lower than two months ago. However, drivers will have to be patient until the lower oil price and the stronger franc push down petrol prices at the pumps.
A barrel (159 liters) of Brent Crude oil currently costs around USD 82, almost USD 10 less than in mid-April. The shock of the decision by the expanded Organization of the Petroleum Exporting Countries (OPEC+) to gradually increase production volumes again from October is still having a profound effect on the markets.
Together with the recent strengthening of the Swiss franc, the signs at the local petrol pumps are therefore pointing to an easing of the situation. It usually takes a while for lower crude oil prices to translate into falling prices at the pumps.
Petrol prices are subject to their own laws. According to surveys by the Touring Club Switzerland (TCS), the average price for a liter of unleaded petrol (95 octane) is currently CHF 1.88 and that for a liter of diesel CHF 1.91 - and the trend is downwards.
As recently as January, however, a liter of unleaded petrol cost just 1.75 francs. And that was at a similarly high crude oil price and dollar-franc exchange rate. However, it is not only the recent downward trend in crude oil prices, but also the renewed strength of the Swiss franc, that suggests lower petrol prices in the short term.
This is because the strength of the Swiss franc is known to make imports of crude oil and crude oil products cheaper from a Swiss perspective. However, experts are already warning that consumers should not prepare themselves for permanently lower crude oil prices.
Oil demand greater than supply
As commodities strategist Barbara Lambrecht from Commerzbank writes, the OPEC+ decision and disappointing news from the US economy caused the price of a barrel of Brent crude oil to fall temporarily to a four-month low. However, it considers this reaction to be exaggerated. In addition, OPEC+ has also restricted the fact that the organization wants to react to market conditions, meaning that it could also turn off the tap again.
Despite the plans of Opec+, the Commerzbank expert assumes that the oil market will be undersupplied in the second half of the year. Based on this, she expects prices to rise again.
UBS commodities expert Giovanni Staunovo believes that crude oil inventories will decrease in the coming weeks and that global demand for oil is likely to increase at the same time. He therefore also expects prices to rise again.
The commodity strategists at Goldman Sachs see the oil price fluctuating within a fairly wide range of 75 to 90 dollars per barrel. In anticipation of healthy demand during the summer months and in view of the positioning of non-commercial market players, the US investment bank also expects prices to rise again soon.
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