Oil prices edge lower for a 2nd week as pumps continue to climb
Originally uploaded on July 01, 2022
Oil prices dipped for a second week on the wholesale market, providing further welcome relief to fuel card customers as we move into next week. This drop in the commercial and wholesale market, which has been rising month on month since the Spring, comes at a time when retail pump prices continue to rise as they play catch up. As a result, drivers are paying more at the pump with little sign of these prices easing. The average cost of diesel now exceeds £2 per litre in many regions.
With OPEC scheduled to meet yesterday (Thursday 30th June), it will be interesting to see if the allied producing nations can pump up production as they decide on how much more oil to send to world markets.
However, the general thought from oil analysts suggests that OPEC may not be much help. This is largely because the 23-member OPEC+ alliance, which includes Russia, is struggling to produce enough oil to keep up with the rebounding demand for fuel, which has shot up since COVID-19 restrictions have been lifted worldwide. This increased demand, alongside the fact that many Western counties are now shunning oil purchases from Russia due to the war with Ukraine, means that there’s less oil on the market to go around. Naturally, this will keep prices high. Nevertheless, if agreed, any increase in production could help soften prices, if only in the short term.
In the UK, the chancellor said on Tuesday that he would examine whether to reduce the levy further after cutting it by 5p a litre in March. Mr Sunak is under pressure to help motorists that are paying record prices at the pump as well as those covering the cost of other household goods, which have also jumped.
Further misery could be on the way as fuel protests could take place over the coming weeks, which has the potential to cause supply issues.
Fuel card customers will see a fall in the region 3-4ppl this week. For those wanting to make the most of fuel card’s fixed rates and often reduced prices, get in touch with our team today.