The NI Oil Federation has advised that oil prices are rising on the back of global events. David Blevings, spokesperson for the Federation said, “Unfortunately the instability and concern around the Trump decision to withdraw from the Iran deal has made traders nervous and is adding a premium to crude oil prices. In turn this is increasing the cost of wholesale fuel costs which has to be borne by importers and distributors.
We have seen an increase in local terms and this is unwelcome news for both consumers and distributors alike who have no choice but to pass on increased costs. Despite the heatwave and reduced demand the main driver is the price of refined products and these are increasing on the back of increasing crude oil prices.
Speculation was rife that we could see $80/barrel by the summer with OPEC and non-OPEC countries restricting supply but there is talk of Saudi Arabia doing an about turn at the next OPEC meeting and increasing supply to reduce prices which would be good news pre winter. The oil nations need to play a balanced card as increasing prices too high will force more and more motorists around the world to switch over to electric vehicles reducing overall oil demand.
Looking forward we see the tension in the Middle East reducing as discussions there reach a peaceful solution, American shale oil production ramps up and with an about turn on supply sanctions by Saudi Arabia a real possibility this should push prices back to the relatively normal $50-60/barrel range. We would be confident that prices will return to a more ‘normal’ level by the end of the year”, added David.