Last week, fuel prices in Poland changed once again. Gasoline decreased by 1 grosze per liter, and diesel oil by 2 grosze per liter. Although this is a minor adjustment, it reflects broader global trends in the oil market. Does this foreshadow further reductions, or is it just a temporary stabilization?
On the Rotterdam exchange, the monthly increase in Brent oil prices was halted. After reaching a peak of $82 per barrel on January 15th, the price dropped by $5 within ten days, reaching $77. It currently fluctuates around $76 per barrel. However, Monday’s price increase offset previous declines, reintroducing an element of uncertainty to the market.
Three key factors influencing fuel prices
1. Rising gas prices in Europe
The winter of 2024 brought Europe the first long-lasting cold waves since the energy crisis in 2022. The result? Gas reserves in the European Union have fallen to their lowest level since that period – storage facilities are only 49% full, compared to 67% a year earlier. As a result, gas prices on the Amsterdam exchange (TTF) have risen by 4%, reaching their highest level since February 2023. The industry, in search of cheaper alternatives, is turning to oil and coal, which may boost global demand for energy resources.
2. Russia reduces oil production
Russian oil production fell in January to 8.962 million barrels per day, which is a result of 16,000 barrels less than OPEC+ agreements. Even though Russia committed to presenting a new plan for production cuts, it has not done so yet. The situation is further complicated by harsh winter conditions and the geological specificity of deposits. At the same time, Russian refineries are increasing oil processing, hoping for an increase in fuel exports after Joe Biden’s administration imposed new sanctions on Russian companies Surgutneftegaz and Gazprom Neft, responsible for 25% of Russia’s oil export.
3. Trade war and new tariffs on steel and aluminum
Despite economic tensions, oil prices rose on Monday. The reason may be the announcement of a broad package of tariffs on steel and aluminum imports to the US, announced by former President Donald Trump. The new 25% tariff is expected to hit Canada the hardest, the main supplier of these commodities to the United States. Trump also announced a policy of “retaliatory tariffs” for countries that impose tariffs on American products. If these actions lead to a global trade war, the prices of energy commodities can become even more unpredictable.
What’s next for fuel prices in Poland?
Forecasts for the next week indicate fuel price fluctuations of 2-3 grosze per liter in both directions. In the long term, oil price stability remains uncertain. If there are no dramatic changes in the market, the second half of February may bring further, albeit minor, fuel price reductions.
For logistics companies, fuel price instability means implementing a regular refueling strategy as a cost control tool. Regular stock replenishment will allow them to better manage short term price fluctuations and avoid unexpected expenses.
Are the current fuel price declines in Poland the beginning of a longer trend, or just a temporary correction? The answer to this question will depend on the further development of the situation on global markets.
Comment prepared by Marcin Wawrzkiewicz, Country Manager of Malcom Finance in Poland.
Source: https://managerplus.pl/stabilizacja-czy-dalsze-spadki-prognozy-cen-paliw-na-druga-polowe-lutego-84330
