The average bulk diesel price dropped by 7.6% in November, but that decline from October still left it at over 20% higher than the position 12 months earlier, figures compiled by trade body RHA show.
Average excluding VAT for November was 139.55ppl. That compares to 151.03ppl in October. However, the latter figure represented a significant increase from September’s 141.29ppl average. Hence the November average is only 1.2% lower than that seen two months prior. It is 10.2% below the year-to-date high of 155.41ppl recorded in June.
Sterling made a small gain against the US dollar in November. Its average increased for the first time since January and it has lost 14% of its value then. Forecasters suggest that sterling could recover further, although those predictions are not without caveat.
Despite the fallback in average bulk diesel price in November, the month’s average was 23.38ppl, or 20.1%, above the position 12 months earlier.
The month-on-month average cost of Brent decreased slightly in November to US$90.85 per barrel. That is down by 23.6% from the US$118.84 peak in March, but RHA notes that such a figure does not represent the actual position at the end of the month. On 30 November, it was at around US$85 per barrel. However, concerns have since been raised that the price of oil could rise as further restrictions on Russian supplies are introduced.
A report for November 2022 by the International Energy Agency (IEA) cited by RHA forecasts that global demand for diesel will see “a small decline” in 2023 “under the weight of persistently high prices, a slowing economy and despite increased gas-to-oil switching.”
IEA adds that new distillation capacity to be added by the end of 2023 could offset reduced exports from Russia, but that margins for diesel remained at “elevated levels” during October. Markets for diesel remain “exceptionally tight,” the report underlines. “Increased refinery capacity will eventually help [to] ease diesel tensions,” IEA predicts.