What a week for oil prices…
Fuel prices ease in a volatile week for oil prices
The early part of this week saw a steady fall in the barrel price of oil from the recent high of $139 to just under $100 per barrel, albeit briefly.
This pressure eased partly due to signs that Russia may be willing to have substantive peace talks with Ukraine to de-escalate the current conflict, which will hopefully lead to a ceasefire in the coming weeks.
The market was also closely monitoring the evolving uptick in Covid-19 infections across China. Cases have reached a two-year high, with the virus outbreak expanding rapidly in the country’s north east. This has caused concern that China’s manufacturing output may be affected, forcing a decline in oil demand.
During the second half of the week, oil prices began to rise sharply amid fears posited by the International Energy Agency (IEA). They suggested that the market could lose up to 3 million barrels per day due to supply cuts to Russian oil exports on the back of recent sanctions imposed by Europe and the US. This is far greater than the 1 million barrel of oil per day previously estimated.
In the retail sector, prices at forecourts continue to rise as they play catch up to the recent spike in wholesale fuel prices. However, for fuel card users, due to the wholesale price easing at the beginning of the week, prices are expected to drop between 8-10 pence per litre from last week.
On Wednesday 23rd March, Chancellor Rishi Sunak will be delivering his spring statement on the health of the economy to the House of Commons and will be addressing the spiralling cost of living. The announcements he will be making will have nationwide effects, so anyone in the fleet and fuel industries need to make sure they’re up to date.