Home News Due to the rise in oil prices, there is no room for a greater reduction in fuel prices, the analyst claims

Due to the rise in oil prices, there is no room for a greater reduction in fuel prices, the analyst claims

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Due to the rise in oil prices, there is no room for a greater reduction in fuel prices, the analyst claims

The prices of the primary raw material, i.e. oil, continue to rise, so there is no room for further reductions in fuel prices on the market yet. This was stated by Marek Nemky, financial market analyst at XTB.

The demand does not stop

“Wholesale prices in Rotterdam are currently copying the development of fuels. Overall, however, we see a number of risks in the fuel market, which are currently dampened by weaker European demand,” he added.

According to him, the price of Brent crude oil ended last week at USD 85.33 per barrel, which was 3.97 percent more compared to the previous week. “Currently, we see the price at a similar value as at the end of last week,” he noted.

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“We have been observing positive sentiment on the market for a long time, which is also supported by current news. When we look at the demand side, it does not subside. The revision of macroeconomic projections from the United States central bank also indicates stronger demand from one of the largest consumers of oil. Strong demand is also supported by changes in stocks in the US, which have been in decline for a long time,” he added.

Increased risks on the supply side

According to Nemky, there are still increased risks on the supply side. “According to Reuters, Ukrainian drone attacks on Russian refineries hit up to seven percent of the capacity of Russian refineries. In the short term, this may cause higher exports of oil, as Russia will not be able to process it, but on the other hand, it will cause lower exports of fuel,” he said

“Russia is already struggling with a shortage of gasoline, as it has banned the export of this substance. Banning the export of diesel could be another measure,” he emphasized.

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“The OPEC+ cartel also continues to maintain restrictions on production. Even Iraq, which did not comply with quotas in the first months of the year and exported a little more, has now pledged to reduce its exports. On the other hand, the US continues to increase production, which is already at historic highs. However, their refineries have been in maintenance mode until now, and fuel production has been reduced. Even here, however, better times are coming, refinery maintenance is gradually ending and production is starting again,” added Nemky.

01 – Modified: 2024-03-22 10:32:38 – Feat.: – Title: Biden urges Ukraine to stop attacking Russian refineries. Gasoline prices in the US are rising 02 – Modified: 2024-03-21 18:01:15 – Feat.: – Title: Oil falls due to weaker demand for gasoline in the US and hope for a ceasefire in Gaza 03 – Modified: 2024-03-20 16:39:53 – Feat.: – Title: Oil fell from several-month highs before the Fed’s rate announcement 04 – Modified: 2024-03-16 13:47:57 – Feat.: – Title: Growth of oil production in the near future will drag non-OPEC+ countries 05 – Modified: 2024-03-15 18:19:06 – Feat.: – Title: Oil prices are falling today, but they could show three percent growth for the whole week



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