The average price of delivered bulk diesel rose by 1.84ppl to 107.56ppl in June after four consecutive monthly falls, data compiled by RHA show. Such an increase represents an uplift of 1.7% from May’s 105.72ppl average. It sits against a further minor strengthening of sterling against the US dollar during the month.
On a brighter note, the average price of Brent fell to US$74.98 per barrel during June, the trade body’s figures show. That is the lowest return since December 2021. Less positively, the US Energy Information Administration (USEIA) revised upwards its predictions of future oil prices in its June short-term energy outlook.
Although the bulk diesel average rose in June, it still sat at its second-lowest point since September 2021. There remains no sign of coach hire rates dropping despite the fuel average now being 47.85ppl lower than its crisis peak in June 2022, anecdotal evidence continues to show.
On oil price forecasts, USEIA’s June short-term energy outlook predicted that the Brent average for Q3 and Q4 would be US$78.32 and US$79.97 per barrel, respectively. Both of those figures are modest increases from what the Administration foresaw in May.
The change to forecasts for 2024 is more pronounced. USEIA now believes that next year, Brent will increase consistently as each quarter passes to reach US$85 per barrel by Q4. In May, its predictions were much different and had consistent falls to US$72 by Q4 2024.
An announcement by OPEC+ in early June that crude oil production cuts will be extended into 2024 is cited as a reason for those changes to predictions by USEIA. However, non-OPEC nations are expected to increase production to give a net increase in global liquid fuels production in 2023 and 2024. That sits alongside expected increases in global oil consumption this year and next.
Away from fossil diesel, interest in biofuels as a drop-in replacement continues to grow. However, it is thought that adjustment of the domestic tax regime to make biofuels more attractive remains unlikely, with offhand discussions between a government representative and a body representing coach operators having suggested that such a step does not form part of Treasury thinking.
