The average price of delivered bulk diesel fell slightly further in December 2023 according to data collated by trade body RHA, as indications grew that the fuel market may be stabilising somewhat after two difficult years.
For that month it came in at 113.41ppl plus VAT, a drop of 4.54ppl, or 3.8%, from November, completing a period where fluctuation was much less marked than the crisis-hit 2022.
December’s decline was a third consecutive month-on-month fall. While still significantly above the 2023 low of 105.72ppl recorded in May, the final month of the year saw a return that was still 15.43ppl below where the bulk diesel average price began 2023.
Brent largely continued to mirror diesel into December. It saw a third consecutive month-on-month fall to its lowest since June 2023, at US$77.31 per barrel. In addition, sterling further grew against the dollar, to US$1.27. It remains weaker than before the start of 2022’s fuel crisis, but well above the US$1.13 low seen in September and October of that year.
In an indication that the diesel market may be steadying, variation in bulk quotes received by RHA members across December 2023 was much smaller than in prior months. There was 4.36ppl between the highest and lowest in a metric that earlier in the year was sometimes more than double that.
Perhaps most noticeable during December 2023 was the extent to which the US Energy Information Administration (USEIA) revised downwards its predictions for oil prices in 2024. Its final Short-Term Energy Outlook for the year cut forecasts for Brent by over US$10 per barrel for each quarter compared to projections made in November.
The scale of that downward shift aside, USEIA believes that oil prices will see an uptick over coming months thanks to production cuts in OPEC+ nations, although it now predicts that across 2024, the Brent average will be within 17 cents of 2023. The Administration’s quarterly forecasts peak at US$84.03 in Q2 before tailing off to US$81.00 in Q4.
Real-time data and predictions from USEIA add weight to the argument that the diesel market is broadly stabilising, albeit without a return to pre-crisis prices of sub-100ppl excluding VAT.
Fears that war between Israel and Hamas could have an impact have receded, while one source suggests that piracy in the Red Sea and the decision of some oil carriers to divert tankers via the Horn of Africa will also have little influence.
