A look back

Last week witnessed Brent crude touching its highest price since its recent surge, peaking at $88/bbl on Thursday. This notable 18% ascent over a span of 7 weeks was accompanied by a significant uptick in diesel prices.

A primary catalyst behind this upward trend was the persistent impact of OPEC+’s production curtailments, with a further reduction of 836,000 barrels daily. This decision was made in light of subdued demand from China, whose crude oil imports recently plummeted to a six-month nadir amid dwindling stockpiling.

Additionally, the ascent in oil prices was amplified by a robust dollar, which made oil more costly for buyers using alternate currencies. The week drew to a close with Brent Crude stabilizing at $86.7/bbl on Friday.

A Look Ahead

Over the weekend, Brent Crude maintained some stability, commencing on Monday at $86.5/bbl. This consistency follows last week’s revelations of China’s wobbly economic rebound and the dollar’s strength countering seven weeks of accrued gains due to tightening supplies.

As we glance towards the week’s prospects, two primary factors emerge: China’s tepid economic bounce-back and the dollar’s might could exert downward pressure on prices. Conversely, OPEC+ remains unwavering in its commitment to regulate supply and balance the market.

Influences from heavyweights like Saudi Arabia and Russia appear to dominate the market sentiment. With the Saudis needing Brent Crude to hover around $100/bbl to balance their financial ledgers, especially given their ambitious $1 trillion skyscraper initiative now underway.

This scenario has been, and is expected to remain, closely tied to hikes in Diesel/Low Sulphur Gasoil market prices, which ultimately dictate the retail rates consumers encounter at fueling stations or through vendors.