Fuel prices in Germany are on a freefall, mimicking the fall in crude oil prices. According to ADAC, diesel is now as cheap as it was in July, and petrol is even cheaper than it was in mid-January. The average price for a liter of Super E10 now stands at 1.73 euros, while diesel costs 1.715 euros, a decrease of two cents from the previous week's price.
The descent in fuel prices is primarily due to the ongoing decrease in crude oil prices. North Sea Brent crude has reached its lowest level since July, hovering around $76 per barrel. Uncertainty about OPEC producing countries reducing their output and the anticipated increase in supply from non-OPEC nations, like the USA, have added pressure to the prices. The American Petroleum Institute reported an increase in oil inventories on Tuesday evening.
Despite the lower energy tax on diesel, the price difference between the two fuels is negligible for German consumers. Heating oil demand has kept diesel prices relatively high. ADAC suggests that drivers should fill up their tanks in the evening, between 8 and 10 pm, or between 6 and 7 pm, to pay less than they would during the morning.
Factors contributing to this decrease in fuel prices include the decline in crude oil prices, OPEC and non-OPEC nations' contributions, geopolitical pressures, and market dynamics. The recent drop in crude oil prices, currently around $76 per barrel, is a primary factor. OPEC's commitment to reducing production and the expected increase in supply from nations like the USA remain uncertain. Non-OPEC nations, such as the United States, are also influencing the market with their increased oil production. Geopolitical influences, like Trump's calls for OPEC to increase production, have added to the mix, while an ample supply and moderated demand growth are expected to temper any potential price gains.
[1] Source: Reuters, "Oil prices rise after report of sharp OPEC output cut" [2] Source: Bloomberg, "Russia Sends Out Oil Cargo to India, Circumventing EU Sanctions" [3] Source: Bloomberg, "Brent futures drop to lowest since April as oversupply worry intensifies"
