Usually, war violence in the oil-rich Middle East guarantees sky-high prices at the pump, but now the price is steadily falling. The recommended price for a liter of Euro 95 is now 2.06 euros, which is 22 cents less than in the spring. In practice, the price of petrol is about 25 cents lower than the recommended price. At Fieten Olie in Steenwijk, the price is currently the lowest: 1.63 per liter. Steenwijk is not around the corner for many people, but in the big cities too, refueling for 1.80 euros is possible with a bit of searching. For diesel, the drop since April is 22 cents; a liter of diesel is about 1.56 euros at unmanned stations. Changes in China The reason for the ‘cheap’ fuel can be roughly summed up in one word: China. For years, the Chinese and their rapidly growing economy were the biggest force behind rising oil prices. But that is changing. The country is increasingly focusing on sustainable energy – solar and wind – and is trying to reduce its dependence on oil. If the economy also slows down, this will have an impact on the oil price worldwide. China only needs 1 percent more oil this year than last year, when oil demand rose by 10 percent. Electric cars and trucks running on natural gas are slowly but surely taking over the roads in China. It’s all going well And there’s more. Jilles van den Beukel, energy analyst at the Hague Centre for Strategic Studies, says that the global oil market is also slowly but surely abandoning the risk premium in the price. The fear of an oil shortage because Russia is being boycotted turned out to be unfounded. “Russian oil finds its way to the world market via India and China. And in the Middle East too, you see that parties are reluctant to escalate on a really large scale. Iran and Hezbollah are holding back. You could almost say that Israel is the one that escalates the most. The rest are still being a bit cautious. It could have been much worse. The market thinks: it will work out.” The oil-producing countries united in OPEC want to gradually drop their production restrictions in order to be able to sell more oil. ”Then they temporarily accept an even lower price. They have to, because you also see Shell, for example, making new investments in fossil fuels and less in sustainable energy, which means that oil from other countries is coming onto the market.” Favorable dollar rate This month, both OPEC and the International Energy Agency lowered their expectations for the global need for oil. The price for a barrel of crude Brent oil then fell to 68 US dollars, the lowest level in three years. Oil is paid for in US dollars and that is also favorable for Europe at the moment. A year ago, a dollar cost 94 cents and now it is 90 euro cents. Some market researchers do not rule out that the price of gasoline could fall by another dime in the near future. According to Van den Beukel, that is guesswork. You can read more about gasoline prices in this article
Source: www.autoweek.nl
