What's happening in the fuel market

30 August



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At the start of the year, the cost of crude oil was around $66 a barrel. While the price hit its peak in June, reaching nearly $80, it then dropped down to $74 a barrel in July. The reason that the price has dropped again is because Libya has reopened it’s crude export terminals and other OPEC countries (like Russia) kept their output levels high to keep oil prices low.

OPEC have done this in preparation for the U.S. sanctions against Iran (The third largest OPEC country) in November. In August, the proposed sanctions created uncertainty in the market place and caused fuel prices to increase. This is likely to continue throughout the rest of the year.

Finally, the FX exchange rate between US Dollars and GBP has changed between the start the year and July, from 1.3479 to 1.3117. The FX has affected price per litre (ppl), as at the end of July it is approximately 2.70ppl higher than if the FX was still at 1.39, like it was at the end of April. This exchange rate has been declining since May, due to a US Federal Reserve meeting, where they discussed that US interest rates were planned to be increased in June.

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