Fuel prices continue to break records. In one week, the average price of diesel increased by 3.3 cents to 1.6214 euros, according to the latest official score from the Ministry of Ecological Transition. The SP95-E10 rose by 2.3 cents, to reach 1.6821 euro.
What increase a little more the budget of motorists, who grimace when filling the tank. By way of comparison, at the beginning of the Yellow Vests crisis in 2018, diesel had “climbed” to 1.53 euros/litre.
This rise in prices at the pump follows that of oil. On Monday, the price of a barrel of Brent from the North Sea for March maturity exceeded 86.4 dollars, while a barrel of West Texas Intermediate (WTI) for February delivery rose by 0.45% to 84.20. dollars.
Supply disruptions in Libya and Nigeria
Several factors contributed to this rebound, including production interruptions “in Libya, Nigeria, Angola, Ecuador and, more recently, in Canada due to extreme cold”, explains Hussein Sayed, analyst at Exinity. “Markets remain focused on the delicate balance between supply and demand, which seems to have a rather large impact on price fluctuations throughout the post-pandemic economic recovery,” notes Walid Koudmani, analyst at XTB.
Nigeria, for example, has been producing 0.5 million barrels per day less since mid-2020, or 1.4 million bpd, according to SEB figures. Angola’s supply has also been declining since 2016, now reaching 1.2 million barrels per day.
Geopolitical risk is also added to the equation. If the conflict between Russia and Ukraine escalates and leads to further disruptions in Russian gas supplies to Europe, energy prices, and therefore crude oil, might rise further, some analysts say. On Friday, the United States accused Russia of having sent agents to Ukraine to carry out “sabotage” operations in order to create a “pretext” for an invasion of the neighboring country. What further heighten tensions between the two countries when a major cyberattack hit Ukraine.
Natural gas prices, which are still very high, are contributing to the rise in oil prices. The result is “an increase in the demand for diesel and fuel oil to replace natural gas, wherever possible”, underlines Bjarne Schieldrop, analyst at SEB.
And the Omicron variant of Covid-19, first perceived as a threat to crude purchases, is proving less severe for demand than its predecessors, not impacting fuel consumers.