In the next few months no significant increase of oil price is to be expected, and hence we probably will not see painful increase of oil prices at petrol stations.
Currently Brent oil prices and WTI on the stock market oscillate around 38-40 $ per barrel. But as far back as January, prices dropped below 30 $ to the lowest level for over a dozen of years. In October 2015 Goldman Sachs was even forecasting, that it could fall as low as 20 $. Oil prices are pushing down into the pit by huge oversupply of the crude oil.
Since in February Saudi Arabia, Qatar, Venezuela and Russia had agreed to freeze oil extraction, prices started rebound gradually in the following weeks. The minister of energy and industry of Qatar- Mohammed Saleh al-Sada has recently informed, that several other producers, who are going to meet in Doha in April, support this initiative.
Meeting in Qatar may not necessarily end up with consensual compromise, concerning freezing of production (there is no question of limiting extraction). Iran probably will not join in the agreement. Only recently sanctions against this country have been lifted. Teheran does much to begin exporting to the western markets as much oil as possible. Iraq is reluctant as well, because oil trade is one of the main source of income for this destroyed by war country.
According to IEA – International Energy Agency, world’s oil supply in 2015 exceeded demand by 2 million barrels per day, this year the gap will reach 1.1 million barrels. That means, that even if production will be frozen, oil prices should not raise considerably in 2016. The majority of experts predict stabilization at the level of 40-55 dollars per barrel in this year and slow growth in the following years (Moody’s, IEA).
What does that means for Polish drivers? The outcome should be stabilization of prices at the petrol stations in Poland at a level below last year’s average. The falls in fuel prices were observed quarter on quarter, according to experts from BM Reflex. In the first quarter 2016, in comparison to the first quarter 2015, consumers paid less by 46 groszy per liter of unleaded 95 petrol, by 37 groszy per liter of unleaded 98, and by as much as 71 groszy per liter of diesel oil, respectively. Even last increases in oil prices were not so painful for Polish consumers because Polish zloty gained against the US dollar during the same period, what made the potential for rises in petrol price at the stations much weaker.
It is important to bear in mind, that the meeting of oil producers in Doha is scheduled for April 17th. Not only OPEC members but also countries, which are not aligned with organization, are going to attend the meeting. Their goal is to freeze extraction, and thus imply an increase in oil prices.
In three sentences:
Without changes in trends on commodity markets or geopolitical maelstroms, the oil price shall remain at low levels. That’s good news for Polish drivers. But it is worth looking closely to the outcome of the meeting in Qatar, scheduled for the 17th April.