The average price of delivered bulk diesel showed an unexpected modest drop during October, although the short- to medium-term outlook remains unclear in view of upheaval in the Middle East and its associated impact on oil markets.
Data collated by trade body RHA shows that the average return for October was 124.41ppl plus VAT, down by 2.65ppl, or 2.1%, from September. This slight cut follows four consecutive increases, although October’s average remained above all but two prior months in 2023.
While still significantly above the year-to-date low of 105.72ppl in May, the October return was over 26ppl below the price seen 12 months earlier. However, it remains above the year-to-date average of 117.87ppl. Sterling lost slight ground against the US dollar during October.
The average Brent crude price also fell during the month, although US$88.70 per barrel still represented the second-highest monthly return in 2023. Nevertheless, that figure is over US$30 lower than the 2022 crisis peak of US$118.84 per barrel. It continued to drop through the early part of November, although caution has been urged around future prices.
During October, the US Energy Information Administration (USEIA) revised downwards its prediction for the Brent average in Q4. The Administration’s Short Term Energy Outlook report for the month put that figure at US$90.65 per barrel, down from the US$92.68 forecasted the previous month.
While that is a short-term positive, USEIA’s October prediction for 2024 was less rosy. It believed then that oil will rise in both Q1 and Q2, peaking at US$96.00 per barrel in the latter before gradually dropping to US$94.00 in Q4 2024, although those figures were moderated downwards slightly in the November report.
The average price per barrel of Brent in 2023 was expected to be US$84.09 according to USEIA’s October predictions, with that figure reducing by a few cents in November. The 2024 whole-year average forecast of US$94.91 in October dropped more significantly in the November report, to US$93.24 per barrel.
To illustrate the volatility of markets and the associated risk in the Administration figures, both of those 2024 predictions represent a significant uplift over that forecast made in April, when it was US$81.21.
