The average price of bulk diesel fell slightly in September, but poor performance of sterling against the dollar as the month ended led to a late uptick, according to figures compiled by trade body RHA.
Its monthly average for delivered bulk diesel in September was 141.29ppl excluding VAT, down by 1.82ppl or 1.27% from the August average of 143.11ppl. That minor shift was reflected in maximum and minimum figures quoted. They also changed little and extended from 136.27ppl to 148.53ppl last month.
The average price of a barrel of Brent – measured in US$ – dropped by 7.34% to US$90.57 in September, but that was largely mitigated by the poor performance of sterling. The final week of the month saw a rise in average bulk diesel price of 3.42ppl because of turmoil created by Chancellor Kwasi Kwarteng’s fiscal statement on 23 September, RHA notes.
Sterling’s average value against the dollar dropped by around 5.8% in September. That will lead to further concern among users of diesel despite a slight spot gain by sterling early in October as Mr Kwarteng embarrassingly backtracked on some of his earlier plans that had led to the crisis.
That aside, the average price of Brent in September was at its lowest since January but still over 21% higher than 12 months earlier. By that metric, the average price of bulk diesel in September 2022 was 33.8% ahead of the same month in 2021, although sterling has lost around 17.5% of its value against the dollar over that period.
On 7 September, the US Energy Information Administration (EIA) forecast that oil prices will average US$98 per barrel for Q4 2022 and US$97 in 2023. Staying firmly on the fence, EIA tempers its predictions by noting that supply interruptions and slower than expected acceleration of production could lead to higher than predicted prices, but equally, slower than forecast economic growth could deliver lower rates.
Three weeks later, Goldman Sachs cut its 2023 oil price forecast, according to Reuters. It believes that the rest of 2022 will see downward pressure on oil but cautions that the market remains tight. Some predictions are that sterling will remain weak against the dollar in 2023, which will further pressure diesel prices.
