The average price of delivered bulk diesel recorded a slight rise in January to echo a similar trend in oil, returning 114.59ppl plus VAT according to data compiled by RHA. That shows how the year’s opening diesel average grew by 1.21ppl, or little more than 1%, from December 2023, underlining previous hopes of stability.
Brent crude was up by around 2.4% over the same period, and further geopolitical instability in the Middle East led to some fears that oil would further increase in February.
However, more conflict there has not yet had a major impact. Brent rose as January closed, but fell back during the first week of February to sit at the same c.US$79 per barrel that was the opening month’s average.
RHA notes that the bulk diesel price increased during those first days of February, to around the average level seen during November 2023, in a further indication that a continuation of the falls seen between October and December of last year is on hold.
Nevertheless, January’s return was lower than the position 12 months earlier by 14.25ppl, or 11.1%, although last month remained well above 2023’s floor of 105.72ppl seen in May.
Predictions for oil prices on a longer-term horizon vary significantly. Some sources suggest that they could fall on the back of oversupply and reduced demand in China. Others are less optimistic.
The ever-variable US Energy Information Administration (USEIA) via its January Short-Term Energy Outlook revised its prediction on the Brent average across 2024 downward slightly from December 2023’s report, removing eight cents to offer US$82.49 per barrel. That itself is marginally above the real average for last year of US$82.41.
If correct, the latest USEIA forecast thus suggests that diesel prices in 2024 are likely to be echo those seen across last year, although the Administration has previously been forced to amend its predictions quite substantially over multiple months.
On a quarterly basis in 2024, USEIA believes that the Q1 figure for Brent will be US$82.97, down from an actual US$83.93 in Q4 2023. Its prediction rises in Q2 before showing consecutive falls, with 2024 forecast to finish on US$81 per barrel. An early outlook for 2025 has quarter-on-quarter declines from Q1.