Oil prices rose this week as resilient demand resulted in a larger-than-expected fall in U.S. oil stocks

Oil prices rose this week as resilient demand resulted in a larger-than-expected fall in U.S. oil stocks, offsetting fears of higher U.S. interest rates dampening consumer spending power.


“The crude demand outlook is starting to look better as we enter peak summer travel in the U.S., and as the Saudis were able to raise prices to Europe and Asia,” said Edward Moya, an analyst at OANDA. U.S. crude stocks fell more than expected on strong refining demand, while gasoline inventories posted a large draw after an increase in driving last week, the Energy Information Administration said on Thursday.


That comes as top oil exporters Saudi Arabia and Russia announced a fresh round of output cuts for August. The total cuts now stand at more than five million barrels per day (bpd), equating to 5% of global oil output.


However, oil price gains were capped by strengthening expectations that the U.S. central bank is likely to raise interest rates at its July 25-26 meeting after holding rates steady at 5%-5.25% in June.


The number of Americans filing new claims for unemployment benefits increased moderately last week, while private payrolls surged in June, data showed on Thursday, raising the likelihood of a Federal Reserve rate hike this month.


OPEC will likely maintain an upbeat view on oil demand growth for next year when it publishes its first outlook later this month, predicting a slowdown from this year but still an above-average increase, sources close to OPEC said.


Higher interest rates increase borrowing costs for businesses and consumers, which could slow economic growth and reduce oil demand. Investors will look for cues on rate paths from U.S. and China inflation data next week.


“Oil has found a floor this week and it looks like it could head higher as long as global recession fears don’t run wild,” Moya said.


Meanwhile, back at home, an in depth investigation by the Competition and Markets Authority is likely to force supermarkets and other fuel retailers to publish live prices under a new scheme aimed at stopping retailers from overcharging consumers, the government says.


It comes after Britons were found to have paid an extra 6p per litre for fuel at supermarkets last year as weak competition let them charge more. Under the scheme drivers will be able to compare up-to-date prices online so they can find the cheapest option.


Driving groups say the idea, which is used elsewhere in Europe, is overdue. Energy Security Secretary Grant Shapps said it would change the law to force retailers to share this information. A new “fuel monitor” oversight body will also be set up to scrutinise prices on an ongoing basis.


“We’ll shine a light on rip-off retailers to drive down prices and make sure they’re held to account by putting into law new powers to increase transparency,” Mr Shapps said.


Petrol and diesel prices spiked to record highs in the immediate aftermath of Russia’s invasion of Ukraine but have dropped significantly since then.


The Competition and Markets Authority (CMA) has been investigating the UK fuel market following concerns that falling wholesale prices are not being passed on to consumers. According to the watchdog, supermarkets were usually the cheapest place for fuel but competition was “not working as well as it should be”.


CMA boss Sarah Cardell told the BBC: “We’ve seen retail margins increase over the last few years. And that means that motorists are paying more at the pump than they would be if competition was working really well.”


The RAC’s spokesman, Simon Williams, said the extra costs for consumers were “nothing short of astounding in a cost-of-living crisis and confirms what we’ve been saying for many years that supermarkets haven’t been treating drivers fairly at the pumps”.


Asda – which was separately fined £60,000 by the CMA for failing to provide information in a timely manner to the investigation – said it was still the cheapest traditional supermarket for fuel.

Morrisons said its pricing was “extremely competitive”, while Tesco said it was committed to providing “great value”.


All of them have welcomed the idea of a price transparency scheme, of which a successful example is already in place and said to be lowering prices in Northern Ireland.


The government said that under its new initiative, drivers would be able to access live, station-by-station fuel prices on their phones or satnavs.


At present, retailers only provide price information at petrol stations themselves, making it hard to compare rates, although some websites try to collate this data.


As we head into the second week of July fuel card users can expect an increase in the region of 0.8 pence per litre.


Crude stalls as interest rate hikes balance inventory falls

Oil prices rose slightly in choppy trading in the early part of the week as concerns around the political stability in Russia coupled with lower US gasoline stocks caused prices to spike. However, this proved short lived as investors balanced fears about the impact of global demand for oil on the back of further interest rate rises supressing consumer spending power.


Data from the Energy Information Administration (EIA) revealed US crude oil stocks dropped 9.6 million barrels, catching the market off guard with the second-highest weekly crude exports on record.


That was far bigger than analysts polled prior to the release had expected, with a Reuters survey averaging 1.8 million barrels, while API reported a 2.4-million-barrel drop. At 453.6 million barrels, commercial crude stocks are now at their lowest since the last week of January.


However, US gasoline inventories ticked up again last week as implied demand slowed, while imports fell for the second time in a row.


On the economics front, investors have been focused on the European Central Bank’s annual forum, where the world’s top central bankers have reaffirmed that tackling inflation remains the priority.


Leaders of the world’s central banks reaffirmed further policy tightening will be needed to tame stubbornly high inflation, although they remain hopeful a full recession can be avoided.


US Federal Reserve Chairman Jerome Powell again indicated two more rate hikes were on the cards this year, while ECB chief Christine Lagarde flagged a ninth consecutive rise for the eurozone in July.


“Nearly every major policymaker at the ECB’s annual forum has signalled that rising prices are one of the biggest near-term economic risks for central banks this year,” said Phil Carr of the Gold & Silver Club.


“Not a single policymaker expects inflation to fall back to their 2% target in the next 12-24 months – strengthening the case to continue hiking rates at upcoming policy meetings in July and September – potentially all the way through till December,” added Carr.


All this is better news for fuel card users who can expect a fall in the region of 1.7 pence per litre as we head in to the first week of July, welcome news following last week’s price rise!

Ultimate Guide to Fleet Management: How to Manage Your Drivers for Success

Managing a fleet of drivers can be a challenging task, especially with the increasing demand for efficient and reliable transportation. In this guide from the experts at Fuelmate, we’ll discuss the best practices for fleet driver management, including how to effectively manage your drivers for success.

  • How to manage your fleet

  • How to manage your drivers

  • Builiding team rapport with drivers

  • How to reduce driver turnover rate

  • Conclusion

  • Other handy driver guides


How to Manage Your Fleet

Managing a fleet of vehicles is not an easy task. It requires proper planning and organisation, especially when it comes to managing the drivers who operate these vehicles. 

As a fleet manager, you have to ensure that your drivers are safe on the roads, delivering goods and services efficiently, and following all relevant regulations. By looking at some different management methods discussed in this article, you can review how to manage your fleet more effectively.


Manage Your Drivers

Understanding how to manage drivers well is one of the most important skills for a fleet manager; you’ll forge a better working relationship with your drivers while improving productivity. However, effective fleet and facility management aren’t always straightforward.


When it comes to corporate fleet management, your drivers will make up one of the largest sectors of your workforce. For the most part, your drivers will be out on the road and therefore away from the office, so feeling confused about your fleet service management strategy is understandable.

You may struggle to feel confident about the effectiveness of your managerial approach and find it difficult to monitor your fleet goals.

Let’s analyse some effective methods for managing your drivers:


Publicly acknowledge & reward drivers

Maintain positivity in fleet and facility management by publicly acknowledging and rewarding drivers for their accomplishments, such as safe driving or reaching goals. This creates a positive environment, motivates drivers, and encourages good behaviour. Implementing a tally system or giving gifts like restaurant vouchers can also incentivise drivers and improve morale. These rewards can be factored into your budget for a positive impact.


Keep open channels of communication

Effective corporate fleet management requires open communication channels for drivers to comfortably share feedback, concerns, and ideas. As a manager, communication with your drivers will help you manage them better and understand their experiences on the job. When drivers feel heard and valued, they are more motivated and happy, leading to improved productivity, morale, and driver retention.


Use data to measure performance

Another corporate fleet management tip is to use data to measure driver performance. Of course, this isn’t the only way to measure performance, but it’s an effective tool when used correctly.


Data is a tool you should harness when you manage drivers because facts and figures don’t lie. They provide an accurate image of driver performance. You can then share this information with your team and use it to praise drivers or highlight areas of improvement.


Fuel cards

Fuel management systems and telematics offer data insights into driver performance, enabling effective fleet service management. Building team rapport is crucial to improving job satisfaction and performance. Showing empathy, honing rapport-building skills, and practising them daily can revolutionise work relationships, regardless of geography. By creating an environment where drivers can thrive, managers can get the best out of them, positively impacting fleet efficiency and productivity.


According to Forbes, 96% of employees believe showing empathy can improve staff turnover rates.

red lorry drivin down a raod

Building Team Rapport With Your Drivers

Fleet driver management is a crucial aspect of logistics operations. However, it’s not enough to simply monitor drivers’ performance and enforce safety regulations. Building team rapport with your drivers is equally important in ensuring the success of your fleet operations.

Here are some tried and tested methods, great for helping to build team rapport with your drivers:


Be available

Demonstrate availability and cultivate a high-trust environment to reduce driver turnover rates. Availability starts with an open-door policy and strong listening skills. Remind drivers that you’re available to help and mean it. Consistent availability creates trustworthy, hard-working, and cooperative drivers, positively impacting team rapport.


Show interest

Showing genuine interest in your team members goes a long way. Small talk becomes stale very quickly, and some team members may even grow to resent the insincerity of yet another meaningless conversation about the weather. Set a target to speak about non-work-related topics with each member of your team each day you speak to them. Displays of humanity and genuine interest are one of the most valuable rapport building techniques.


Invest in opportunities to get the team together

Building one-to-one rapport with each driver is the foundation to foster rapport within the team. Organising regular team social events and team building activities can bring drivers together and equip them to develop their skills at work. Conference calls and team chats can also reinforce the value of each team member. Check out our guide to fleet management for more advice and learn about your management style in our previous blog post.



Reducing Driver Turnover Rate

If you’re regularly replacing drivers, it’s time to assess your driver turnover rate. There are several ways to do this, including gathering annual turnover figures and comparing them to the industry average to get an idea of how your company is doing. Separate the data into voluntary and involuntary turnover to get a clearer picture of the extent to which the problem lies with the employee or you, as the employer.


Fleet turnover is high, especially in the haulage industry, and many factors are contributing to drivers leaving their roles so quickly. The three main causes of driver turnover are loneliness, wellbeing and a loss of morale.

Here are some handy tips to reduce your driver turnover rate:


Choose the right people

While many drivers leave their jobs because of the demands of the role, others might leave because they just aren’t a good fit for the company. If someone doesn’t share your company values or can’t be trusted, there’s not much that can be done. To avoid this, it’s important to choose drivers who gel with the company and are trustworthy. When you have clear criteria during the recruitment process, you can rest assured that the right people are on board.


Offer relevant staff benefits

Most companies have staff perks these days, but not all of them are particularly relevant or useful. Instead of having benefits for the sake of it, choose perks that will help your drivers. For example, discounted gym memberships will help your team stay active between journeys while birthdays off guarantee time spent with family rather than spending their birthday behind the wheel. Additionally, be sure to draw inspiration from these three team building activities.



Listening to your drivers is a solid place to start when you’re keen to reduce driver turnover. Employees who don’t feel their voice is valued or heard won’t stick around for long. To avoid this, try regularly asking your employees for feedback about their experiences and listening to their answers. Anonymous evaluation forms can motivate individuals to be honest without fear of being judged for their answers. But, having open one-to-one conversations can build trust and rapport. Active, judgment-free listening is a sure-fire way to learn about the things you can do to make your drivers’ jobs more satisfying.


Take staff wellbeing seriously

Caring for your staff’s wellbeing is key to keeping them engaged and motivated. Listening to their concerns and getting creative with solutions, such as providing healthy snacks or orthopaedic devices, can make a big difference. Enforcing regular breaks and varying journey lengths can help combat driver tiredness. Showing that you’re considering their safety with fleet risk mitigation measures can also boost driver morale.


Offer flexibility

All employees have personal lives, and work can be particularly demanding for fleet drivers. Flexible working is no longer a rarity. If you’re not offering flexibility in work patterns, your drivers may move to a company that does. Where possible, offer flexibility so that your drivers don’t have to compromise so much of their personal lives to get the job done.



 If fleet turnover has been a concern for your company, try these above  suggestions and monitor how your driver turnover rate is impacted. For more tips on managing a fleet, please read our comprehensive guide to fleet management or browse our fleet fuel card options. If you haven’t already, ascertain your management style in our recent blog post.


Other Handy Driver Guides from Fuelmate

Prices up after a mixed week for oil markets

Oil prices fell slightly in early trading this morning (Friday) after a sharp tumble from earlier in the week as fears of rising interest rates and worsening economic conditions wiped out some of the gains.

Since last Friday (June 16th) into the early part of this week oil markets rallied as higher Chinese demand and OPEC+ supply cuts lifted prices, despite expected weakness in the global economy and the prospect for further interest rate hikes.

Also supporting crude are the voluntary output cuts implemented in May by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, plus an additional cut by Saudi Arabia in July. Russian Energy Minister Nikolai Shulginov said it was “realistic” to reach oil prices of around $80 per barrel, Russian state news agencies reported. Shulginov also said Russian oil and gas condensate production is expected to fall by around 20 million tonnes (400,000 barrels per day) this year, reiterating Russia’s expectations.

In Iran, crude exports and oil output have hit new highs in 2023 despite U.S. sanctions, according to consultants, shipping data and a source familiar with the matter, adding to global supply when other producers are limiting output.

Oil has also gained this week on hopes of growing Chinese demand. China’s refinery throughput rose in May to its second-highest total on record and Kuwait Petroleum Corp’s CEO expects Chinese demand to keep climbing during the second half.

However,  markets were shocked nursing a 4% fall from Thursday after the Bank of England hiked rates by a bigger-than-expected margin, while Federal Reserve Chair Jerome Powell reiterated the central bank’s plan for more rate hikes.


The bigger-than-expected rate hike from the BoE came after data showed British inflation unexpectedly grew through May. The trend is likely to attract more hikes from the central bank, with markets raising their expectations for the BoE’s terminal rate this year.

The U.S. dollar also strengthened on Thursday after the Fed’s Powell and other members of the central bank said that at least two more interest rate hikes were warranted, given high inflation levels in the country.

The comments, coupled with the shock BoE decision, fed into fears that economic conditions will worsen amid rising interest rates, denting oil demand this year. Fed members James BullardRalph Bostic, and Loretta Mester are set to speak later on Friday, and potentially offer more cues on the path of U.S. interest rates.

Markets are widely pricing in an at least 25 basis point hike by the Fed in July.

Concerns over high inflation in the rest of the globe were also pushed up by stronger-than-expected Japanese inflation data, with a core indicator hitting a 42-year high.

This saw oil markets largely disregard data showing a drop in U.S. inventories, coupled with strong fuel demand in the country.


Data on Thursday showed that U.S. crude inventories shrank far more than expected in the week to June 16, while total fuel products supplied hit their highest level since December 2022.

The readings indicated that U.S. fuel demand was heating up in tandem with the travel-heavy summer season, potentially heralding tighter oil supplies in the coming weeks.

This, coupled with lower Saudi Arabian production, could tighten global oil supplies this year. But the notion was largely offset by fears of worsening demand.

So the relentless tug of war between supply constraints and weak global economic data continues to shape oil prices, with more volatility in the months ahead highly likely.

For fuel card users an increase in the region of 2.5 pence per litre can be expected as we head into the final week of June, however based on weak trading over the last few days we may see a fall in fuel prices for the beginning of July.

Positive economic data and weaking UD dollar keeps oil process stable

The market remained steady this week finding some support from optimistic news surrounding China, the leading importer of crude oil, which is expected to drive higher energy demand on the back of increased manufacturing activity. Additionally, the recent movement in the US Dollar has introduced volatility into the oil market since Wednesday’s session. On Thursday, the US oil markets experienced a notable surge of around 3%.

Chinese data released on Thursday revealed a significant 15.4% increase in oil refinery throughput in May. This compares to the previous year, marking the second-highest level on record. Kuwait Petroleum Corp’s CEO expressed confidence in continued growth of Chinese oil demand throughout the second half of the year. This positive outlook from China reinforces expectations for rising demand.

Meanwhile, in the United States, retail sales unexpectedly rose in May, and jobless claims exceeded expectations last week. As a result, the US Dollar weakened, reaching a five-week low against a basket of other currencies. A weaker Dollar has the potential to increase demand for oil as it makes it more affordable for holders of other currencies.

Despite these positive factors, market sentiment continues to be is overshadowed by concerns about the global economic outlook. China’s industrial output and retail sales growth in May fell short of expectations, raising apprehensions about the strength of the economic recovery. Furthermore, the recent aggressive rate hikes and interest rate increase by the European Central Bank (ECB) to a 22-year high, along with indications from the US Federal Reserve of a potential half percentage point increase by year-end, add to the uncertain economic landscape.

Higher interest rates could translate to increased borrowing costs for consumers, potentially slowing down economic growth and reducing oil demand. Crude oil prices are grappling with finding solid support as they navigate through the vulnerabilities and potential shocks of the global growth outlook.

Fuel cards users can expect a small increase in the region of .27 pence per litre as we head into next week.

Cost of oil climbs as Saudi cuts supply to boost prices.

The group of major oil-producing countries known as OPEC Plus agreed on Sunday to embark on a complex effort to adjust production as it aimed to halt the recent slide in oil prices, including an additional cut in output of one million barrels a day by Saudi Arabia.


The Saudi cut would be for one month beginning in July, but could be extended.


The group, which includes Russia and its allies, was under pressure to produce a deal to reverse the pessimism that has dominated the oil market in recent weeks. Despite two substantial output cuts since October, the price of oil has drifted about 15 percent lower over the past seven months.


The agreement, the result of lengthy negotiations on Saturday and Sunday, reworks the output quotas of several countries, with the United Arab Emirates gaining and some others losing production levels. “This is definitely not a clean and simple deal,” said Richard Bronze, head of geopolitics at Energy Aspects, a research firm. The agreement includes a voluntary cut of 500,000 barrels a day that Moscow announced in February.


Comments at the news conference after the meeting revealed skepticism that Russia was abiding by those lower production levels. High Russian production levels, and its increased share of Asian markets including India, often at the expense of Middle East oil producers, have become a sensitive issue in the group.


Some of the data “from Russia just does not add up,” said Suhail al Mazrouei, the oil minister of the United Arab Emirates. He said Russian officials “are reaching out to explain the numbers.”


OPEC Plus, in a statement, said that it was acting “to achieve and sustain a stable oil market,” and that it was continuing its recent approach of being “proactive, and pre-emptive.”


As far as the markets are concerned, the key feature of the agreement is the additional production cut by Saudi Arabia, which would bring its daily output to about nine million barrels a day. The Saudi oil minister, Prince Abdulaziz bin Salman, called the move “the Saudi lollipop” while announcing it during the news conference.


After suggesting that cuts were in the offing before the meeting, Prince Abdulaziz wound up being the only official to agree to take an immediate hit.


At the same time, the United Arab Emirates, which is investing billions to increase its capacity to produce oil, was a modest winner on Sunday, gaining an increased quota of 200,000 barrels a day, beginning in 2024. The United Arab Emirates has long sought to produce more oil, even staging a rare public fight with the Saudis in 2021 and suggesting it might leave OPEC.


With oil vital to the economies and governments of many of these countries, it was not surprising that the tricky issue of addressing quotas produced a meeting that ran well into the evening in Vienna.


Mr. Bronze of Energy Aspects said the agreement tried to tackle issues that had bedeviled the group. “I do think as the market digests the details, there is real substance here,” he said.


The oil officials met over the weekend to decide what to do about markets that had weakened in recent weeks. Prince Abdulaziz had been particularly vocal about warning that the group might cut production to shore up prices and trip up traders betting on lower prices.


Other producers, including Russia, have been less enthusiastic about scaling back production.


Sunday’s meeting occurred only two months after OPEC Plus announced an earlier round of cuts. Those trims began in May and have had little time to make an impact. Analysts also say that the oil markets — where prices have slipped about 12 percent since mid-April — have been heavily influenced by broader economic factors, including China’s weaker-than-expected economic growth since the end of its “zero Covid” policies. That could lessen the impact of supply cuts.


The spike in oil prices this week means fuel card customers can expect an increase in the region 2.5 pence per litre as we head into the second week of June.

Oil prices slide on worries over US debt ceiling and this weekends OPEC+ meeting

Oil prices fell this week on the back of concerns whether the U.S. Congress will pass the U.S. debt ceiling pact which has rumbled stock markets all week. This, coupled with mixed messages from the major oil producers has clouded the supply outlook ahead of the OPEC+ meeting this weekend which is  fundamental for oil prices.

In the US hard-right Republican lawmakers said they might oppose a deal to raise the debt ceiling in the U.S., the world’s biggest oil user. Democratic President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy remained optimistic the deal would pass. Biden and McCarthy forged an agreement over the weekend that must pass a divided U.S. Congress before June 5, the day the Treasury Department has said the country will not be able to meet its financial obligations, which could disrupt financial markets. McCarthy on Tuesday urged members of his party to support the deal. read more

“The big elephant in the room is the continued drama over the debt ceiling,” said Phil Flynn, an analyst at Price Futures Group. ” the debt deadline nearly coincides with the June 4 meeting of OPEC+ – the Organization of the Petroleum Exporting Countries and allies including Russia. Traders were uncertain about whether the group will increase output cuts as a slump in prices weighs on the market.

Saudi Arabian Energy Minister Abdulaziz bin Salman last week warned short-sellers betting that oil prices will fall to “watch out” in a possible signal that OPEC+ may cut output. However, comments from Russian oil officials and sources, including Deputy Prime Minister Alexander Novak, indicate the world’s third-largest oil producer is leaning toward leaving output unchanged.

In April, Saudi Arabia and other members of OPEC+ announced further oil output cuts of around 1.2 million barrels per day (bpd), bringing the total volume of cuts by OPEC+ to around 3.66 million bpd.

Chinese manufacturing and service sector data out later this week will also be scrutinised for cues on the fuel demand recovery in the world’s top oil importer. In the UK the constant barrage of bad economic news, the likelihood of higher interest rates and a general slowdown in consumer spending all pose potentially negative pressure on oil prices.

As we head into the first week of June and Summer, fuel card users can expect to see a fall of up to .80 pence per litre depending on their card type.

Oil prices remain fairly static despite shortfall in US stockpiles

Crude prices continued their upward momentum at the beginning of the week with support tied in part to remarks by Saudi Arabia’s top energy official that were taken as a signal the Organization of the Petroleum Exporting Countries and its allies could move to further cut output at their meeting next month.  This in turn could push oil prices towards the $100 per barrel mark. (Currently around $76dpb).

Earlier this week, Prince Abdulaziz bin Salman warned that oil short sellers should “watch out,” threatening a rerun of the price spike that occurred after output cuts were announced in early April. Analysts took the remarks as a threat that more output cuts may be in store.

In addition, oil prices were feeling some upward pressure on Wednesday after the U.S. Energy Information Administration reported a weekly decline in crude stockpiles for the first time in three weeks, with the more than 12 million-barrel drop the largest year to date which caused oil prices to rally.

However,  comments from Russian Deputy Prime Minister Alexander Novak who told the Izvestia newspaper that he didn’t expect any additional cuts to be announced when OPEC+ meets on June 4, Reuters reported.

Novak said he didn’t think there would be any “new steps, because just a month ago certain decisions were made regarding the voluntary reduction of oil production by some countries due to the fact that we saw the slow pace of global economic recovery.”

OPEC+ countries in early April announced around 1.15 million barrels a day in production cuts that took effect at the beginning of this month, while Russia pledged to continue cuts of 500,000 barrels a day through year-end which increased global oil prices.

If OPEC+ does opt to cut crude oil output again, as it did in April, it will add tightness in the oil market and could lift oil prices higher, which could be further exacerbated by the large number of speculative short bets by traders against crude.

Meanwhile, Piero Cingari, independent macro analyst, said he was of the view that another OPEC cut will push crude to at least $90 a barrel, also noting how April created “a massive, short squeeze”.

Cingari further highlighted factors that are limiting oil prices, including global recession fears, that could slow demand, as well as more interest rate hikes from central banks.

Meanwhile, Osama Rizvi, an oil analyst at Primary vision, said there was no chance that oil prices would trace their way back to triple digits.

“The global economy is positioned in a very perilous position. Manufacturing and industrial activity data from China was disappointing recently. Similarly industrial electricity supply and ISM Manufacturing PMIs from the US are showing low activity and contraction.”

In the UK fuel card users can expect a small increase in the region of .10 – .30ppl as we head into the first week of June and indeed the first week of British summer time.

Price momentum eases as weak economic data and surprise US stockpiles impacts oil markets

Oil prices are exhibiting a minimal movement this week as traders remain cautious over global oil demand following an unforeseen rise in U.S. crude stockpiles, coinciding with disappointing economic data from both the United States and China which has softened price momentum.


Crude prices continue to be under pressure as energy traders can’t seem to shake off their concerns about global demand. Despite the optimism surrounding China’s performance in the latter half of the year, the current circumstances are too disappointing to ignore.


Unexpectedly, crude oil stockpiles in the United States saw a surge of 3.69 million barrels this week, as revealed by data from the American Petroleum Institute (API) on Tuesday. Analysts had predicted a decrease of 1.3 million barrels, making this development even more surprising. The total amount of crude oil accumulated this year has now reached approximately 42 million barrels.


Concerns about U.S. economic growth intensified as crude inventories increased, and retail sales in April fell short of expectations. The ongoing discussions on raising the U.S. debt ceiling further weighed on the market, with the Treasury Department warning of a potential default by June 1 if Congress fails to act.


China experienced a slowdown in its economy during the early part of the second quarter. Disappointing figures for April’s industrial output and retail sales contributed to this sentiment. Additionally, stalled debt ceiling talks and underwhelming retail earnings further dampened market sentiment. As a result, concerns about a global recession intensified.


In the UK There has indeed been some mildly encouraging news following the latest GDP estimates published by the Office for National Statistics (ONS).  GDP is expected to have grown by 0.1 per cent in the first quarter of 2023. While the United Kingdom is on track to avoid a ‘technical recession’ in 2023, the anaemic growth and ongoing ‘cost-of-living’ crisis, together with the possibility of rising unemployment, will lead many households to feel like they are ‘experiencing’ a recession, this comes following a week when both Vodafone and BT have announced significant job cuts.


The mixed economic outlook will no doubt continue to weigh on oil prices as we move through the rest of the month. Fuel card users can expect a small increase next week in the region of .50 pence per litre depending on their card type.

Oil prices hedge higher on better-than-expected economic news

The recent downward trend in oil prices haltered this week driven largely by US payroll data which showed that 253k non-farm US jobs were added in April, well above the 160k anticipated and the revised 165k previously. The unemployment rate hit 3.4% last month, the lowest level since 1969.


Sentiment was further bolstered by Chinese tourist travel data that showed 274 million mainland domestic trips were taken over the Golden Week holiday period. This is a bright spot on what has been general market disappointment for the economic rebound on China’s reopening.


Some analysts are now suggesting that the recent slide in oil prices is starting to bottom out, predicting that a more significant pickup in the coming quarter is in the cards.


Oil prices saw their third consecutive weekly decline last week, marking the longest losing run this year. However, that may soon come to pass, according to some market watchers.


“Now it definitely feels like they’re at the bottom — there are multiple signs of that,” said Citi’s Global Head of Commodities Research Ed Morse.


Inventories built a lot during the first and second months of the year, and then they’ve come off. So that’s part of figuring that it’s at the bottom.”


He added that markets are currently facing the impact of OPEC+’s recent production cuts, and the world is moving into a higher demand season. Last month, the oil cartel announced it was slashing output by 1.16 million barrels per day. The cuts came into effect in May and will run until the end of 2023. The production declines prompted some analysts to warn prices could surge to triple digits, which failed to materialize.


“We’re looking more positively at the second and third quarter than what’s happened in the first quarter,” Morse said.


Financial services company ANZ also believes that the oil slump could bottom out soon, with global oil demand set to grow by 2 million barrels per day, keeping the market under-supplied throughout 2023.


“OPEC+ output cuts and a rebound in China’s demand will likely offset slower demand elsewhere. Therefore, we expect prices to bottom out soon,” the bank wrote in a research report dated May 8.


Similarly, Goldman Sachs has maintained its forecasts for a higher crude oil price tag.


“Our forecast remains that Brent rises to $95 per barrel by December and $100 per barrel by April 2024 as we expect large deficits in H2,” the investment bank stated in a report released over the weekend.


However, the global economic landscape remains fragile and filled with uncertainty as the Russia – Ukraine conflicts shows no end in sight.


Fuel card users can expect to see a small increase in then region of .50ppl for next week depending on their card type.


Skip to content