Increased COVID rates in China see oil prices subside

Oil prices began to slide at the beginning of the week over concerns of potential weaker demand for oil across China. Previously, the fresh wave of lockdowns was expected to be avoided, which promoted a sell off from investors. Nevertheless, Shanghai, the financial powerhouse of China, launched a two-stage citywide lockdown on Monday. This lockdown was aimed at containing the recent surge in COVID infection rates.

Pressure on the oil market also eased as positive signs from the peace talks between the Russia and Ukraine were being reported. Russia agreed to reduce military activity in the Ukrainian capital Kiev, although this is yet to materialise.

Downward pressure was also supported on Thursday. Following months of soaring costs, President Joe Biden suggested the US was considering a potential release of 180 million barrels from its strategic reserve in an attempt to soften oil prices.

Despite signs the high demand for oil may be beginning to wane, the backdrop remains uncertain and the risk of fuel prices continuing to lean towards further rises is still present.

However, fuel card customers should see a fall of around 5 pence per litre from Monday 4^th April, which I’m sure will be welcome news.

Looking forward: 

Don’t forget new gas oil legislation has come to effect from the 1^st April, for more information on how this may affect your fleet, make sure to read our piece from November about the new legislation.