The Price of European Brent Crude Oil Reaches $93 per Barrel, Highest Since November Last Year

The price of European Brent crude oil is not the only reason broke the level of $93 on Thursday. per barrel, but growing by 1.7%. reached $93.56. and it doesn’t look like this will be the end. Such prices hasn’t been seen on the market since November last year.

“Expectations for a tighter supply outlook for the rest of 2023 overshadowed concerns about weaker economic growth and rising U.S. inventories,” Reuters comments.

Saudi Arabia and Russia extend 1.3 million barrels per day of oil production cuts until the end of the year will cause a market deficit in the fourth quarter – the International Energy Agency (IEA) reported on Wednesday.

The agency estimates that OPEC+ members’ production cuts of more than 2.5 million barrels per day from the start of 2023 have so far been offset by higher supplies from producers outside the alliance, including the United States, Brazil and still insufficiently imposed sanctions on Iran. “However, OPEC+ production reductions from September will result in a significant supply shortfall in the fourth quarter,” the monthly report said.

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As a result, the content of Wednesday’s report on growing inventories in the US, instead of a decline as expected, only caused a short-term decline in prices. The IEA report prevailed.

“The fact that a truly bearish inventory report only resulted in a short selling temptation speaks volumes and highlights the market mentality,” Tamas Varga of oil brokerage PVM told Reuters.

The zloty does not help fuel prices

In this situation, the fact that fuel prices remain at their current levels in the country can be considered a phenomenon that is difficult to explain. There are still stations in the country where you can buy 95 petrol for PLN 6.20 per liter, such as Moya in Krakow, Auchan in Gliwice, or Optima in Suwałki. One of the Orlen stations in Warsaw (ul. Łopuszańska) sells gasoline for PLN 6.22, according to data from the cenapaliw.pl website.

According to the average calculated by the website autocentrum.pl In Poland, you currently have to pay on average PLN 6.44 per liter for 95-octane petrol, and PLN 6.28 for diesel oil.. This is a consequence of Orlen’s wholesale prices, which supplies approximately two-thirds of the market, remaining at approximately PLN 5 per liter, and in the last two days even below this level.

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In addition to oil prices, the Polish zloty exchange rate should also have a negative impact on domestic prices. After the European Central Bank’s decision to increase interest rates, the zloty weakened against the euro by 0.2%, and against the dollar by 0.8 percent On Thursday, the price of one dollar is as high as PLN 4.35, which means that the price increased by 5.5% in two weeks and by 9.6% in two months. In this way, the dollar price of a barrel of oil becomes even more expensive when converted into Polish zloty.

There is almost nothing left of this year’s strengthening of our currency after the Monetary Policy Council decided to cut interest rates by as much as 0.75 percentage points. As a result, the zloty is no longer a support for retail fuel prices, but a burden.

Oil has been the most expensive since November last year, but over a 12-month period its price is practically unchanged. At the same time, the zloty strengthened by 8%. Taking only these two factors into account, we should have approximately that much cheaper fuel. The price of diesel fuel at stations in September last year was on average PLN 7.28, and 95 petrol PLN 6.29. Adding the 8 percent dollar discount, it can be said that diesel fuel is 6.2 percent cheaper. than it should theoretically be, and gasoline is 11.3% more expensive. However, there are a number of other factors in the price of fuel: the cost of transportation, the use of cheaper supplies, or the price of oil, which may be better for producing diesel.

2023-09-14 14:54:32
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