The calm will still last a few days at the pump, according to Olivier Gantois. According to the president of the French Union of Petroleum Industries (UFIP), guest this Tuesday on BFMTV, “in the short term, there is good news, this week the prices at the pump continue to fall, we will see it in the next government statement which will be published next Monday”. And that drop could be quite significant.
“I think we will have a drop of between 5 and 10 cents this week,” continues the president of the UFIP.
A drop in oil prices
Prices had already fallen the previous week, with a liter of 95 E10 unleaded falling below the €1.80 per liter mark to €1.7941 for the first time since April. In fact, prices have been falling for seven consecutive weeks, after reaching a new high in mid-June, not far from the records set at the start of the war in Ukraine. The cause of this fall has a main component: the price of a barrel in world markets.
“It is falling because the price of oil is falling”, summarizes this morning on BFMTV Philippe Chalmin, an economist specializing in raw materials.
“We have seen these prices drop significantly by about twenty cents [à la pompe, depuis la mi-juin, ndlr] and this is because a barrel of oil has gone from 120, 125 dollars to 95 dollars today”, explains Philippe Crevel, economist, director of the Cercle de l’Epargne (see box below).
Prices that remain higher than before the pandemic
But even with a barrel hovering around $100, prices at gas stations are still much higher than in recent years. Last year, at the same time, on August 6, 2021, the price per liter of SP95-E10 was on average in France 1.5647 euros. That’s 23 cents less than today (a difference that would be even greater without the 18-cent discount effective April 1).
Going back to the pre-crisis, three years ago, on August 2, 2019, the price of a liter of unleaded 95-E10 was even 29 cents cheaper. Motorists then paid 1.5022 euros at the gas station on average, according to figures from the Ministry for Ecological Transition. Prices far from current prices.
A very volatile market
It is impossible to predict whether this price stabilization will last. “You have to be very careful because the oil market is very volatile, warns Philippe Crevel. It is a market in which there are many expectations where you can have a burning refinery in a corner, problems with deposits and that can call into question the equation that is in place today.”
An opinion shared by Olivier Gantois: “While the war in Ukraine lasts, international oil prices will remain high.”
However, in the coming weeks, without major geopolitical changes, these high prices could remain stable. “Making forecasts is like the weather forecast, you don’t know if it will rain in 15 days”, explains Philippe Chalmin with infinite caution. And that’s why forecasts are always random and only bind those who believe them. “However, I think Oil should stay in the $90-$110 range or so. There is no reason for us to see an increase as some still anticipated a few weeks ago.”
Why have oil prices fallen in recent weeks?
After a new peak around $125 in mid-June, the price of a barrel of Brent has been in a downward spiral ever since. “This fall is linked to a lower than expected demand: the global economy is slowing down and therefore there is obviously less pressure in terms of oil demand and this is causing the falls that we are currently seeing”, summarizes Philippe Crevel , economist, director of the Cercle de l’Epargne on BFMTV on Tuesday.
One country in particular is weighing on prices: China. “In July, for example, China imported one million barrels per day less than in July 2021. One million barrels per day is still 1% of world consumption. It is considerable”, points out Philippe Chalmin, an economist specializing in raw materials, on BFMTV.
“There is a little more oil on the market, even if the Americans and Europeans considered it insufficient, Philippe Crevel also recalls. OPEC has decided to put a little more barrels back on the table and therefore that has a general effect on oil market prices”.
Source: BFM TV
