Six months ago, people were worried about rising oil prices. What’s happening at the stations?
The chances of gasoline prices falling to around PLN 6 are growing. Oil is cheap, and investors are waiting for the Fed to cut interest rates, which could revive the world economy, but such an effect would not be visible until next year.
In 30 days, the price of Brent crude oil fell by 11 percent. The maximum price on contracts was $82.28 per barrel, while the minimum was $68.81. Before the end of the first half of September, the price was $2.50 lower than the aforementioned minimum. Since the beginning of the year, oil has fallen by 8.2 percent, and over 12 months by more than 18 percent.
Fears of price increases did not come true
Just six months ago, there were fears that oil prices would increase, but now the baseline scenario is different, which is primarily due to growing supply amid relatively weak and fairly stable demand.
– A lot of supply will flow into the market in the coming months because OPEC+ does not change its decisions and intends to restore about 180 thousand barrels per day from October – says Michał Stajniak, deputy director of the XTB Analysis Department, in an interview with MarketNews24. – Such an increase will take place every month until September next year and in this way the earlier cuts of 2.2 million barrels/day will be completely removed.
Oil remains under pressure, even though supply and demand are currently balanced.
The weakening of demand was related to the 5-year low in oil imports by China observed since May. In the USA, on the other hand, the increase in demand during the holiday season was smaller than usual. Therefore, we have low prices and investors were almost not impressed by the complete (temporary) halt of oil production in Libya.
Investors are waiting for a rebound in demand in China
Investors are waiting for a rebound in demand in China and for the Fed to cut interest rates, which the ECB has already decided to do. These cuts could revive economic growth and thus increase demand for oil. However, this higher economic growth should not appear until next year.
– Supply will grow slowly over the next 12 months, while there is quite a lot of uncertainty on the demand side – comments the XTB expert. – However, if recession symptoms appear, the price of oil could fall to around USD 60 per barrel. However, it is more likely that by the end of the year its price will be around USD 70.
The złoty is still strong, we pay 3.90 PLN for a dollar, and this is conducive to lower fuel prices at gas stations. The ending summer season did not cause significant increases at gas stations this time. There were no fundamental grounds for this price to jump significantly.
– In the fall, Pb95 prices may fall to around PLN 6 if oil prices remain low and the złoty remains strong – assesses M. Stajniak from XTB. – However, this is not yet the base scenario.
