Dhe price of oil has recently fallen significantly and has reached its lowest level since January. On Monday, Brent crude oil from the North Sea only cost a good 80 dollars per barrel (159 liter barrel). The price of the American oil variety West Texas Intermediate (WTI) even reached its lowest level this year at a good 73 dollars per barrel.
Many oil products have also become cheaper again – even if they are by no means really cheap in a long-term comparison. According to the internet portal Heizoel24, heating oil costs an average of 118.92 euros for 100 liters. That was a little over half of what was asked for at the peak on March 9th and about a level as at the turn of February into March.
Diesel under 1.90 euros – Super under 1.80 euros
Prices at the petrol station also went down. According to the Internet platform Clever Tanken, diesel costs an average of 1.86 euros per liter. That was the lowest price since early March. Drivers paid 1.75 euros per liter for Super E10. Since the energy price shock in March, the super price had only been lower temporarily during the tank discount, when the state had temporarily reduced the mineral oil tax.
It is apparently a mixture of various reasons that is making oil cheaper again at the moment. In the short term, the demonstrations in China against the Covid policy were mentioned on the oil market. The question of whether the development could have an impact on the global economy also unsettled investors on other markets on Monday: the stock exchanges in China and Hong Kong went down significantly, the German share index Dax was slightly negative at 14,408 shortly before the market closed points. The weekend demonstrations lasted until Monday night in many cities in the world’s second largest economy.
Longer term, concerns about oil demand in the face of a slowing economy appear to have dampened oil prices after the war-related price shock. Since the middle of the month, the Brent price has collapsed by almost $15.
In the meantime, there have been rumors on the oil market that the oil organization OPEC plus could announce slightly higher production at its next meeting on December 4, after having recently cut it significantly. Cyrus de Rubia, oil specialist at Hamburg Commercial Bank, expressed skepticism that this would happen.
How does the political intervention work?
The effects of further political steps on the oil market are being followed closely. On December 5, the European Union’s oil embargo against Russia came into effect. This could be circumvented in part via detours via Asia. Nevertheless, analysts estimate that it will contribute to a reduction in the oil supply and thus tend to lead to higher prices. “Some of these imports that no longer flow to the EU will be exported to Asia or other countries, but some of them will not find buyers – and that should lead to a lower export and production rate in Russia,” said Giovanni Staunovo, Oil Specialist at Bank UBS..