Gasoline will drop below 39 crowns
Although the conflicts between Istrael and Palestine have increased the price of oil on the world markets, fuel will soon become cheaper in the Czech Republic. Already in recent days, reductions in petrol station prices have been noticed. Experts believe that the favorable trend will continue, and by the end of next week, Natural 95 should be sold at Czech petrol stations for less than 39 crowns.
Reductions
According to CCS, which has been monitoring fuel prices for some time, gasoline costs an average of 40.10 crowns in the Czech Republic and diesel 40.25. In the past week, gasoline has fallen by 46 crowns per liter and diesel by 16. The price decline is mainly due to the reduction in wholesale prices throughout Europe, and this phenomenon is expected to continue in the coming week. After two weeks, the reduction should stop. Not only because of the Israeli-Palestinian conflict but also because of the intention of OPEC, the Organisation of Petroleum Exporting Countries, to reduce production and exports. Since the end of September alone, refinery prices for gasoline have fallen by 1.90 crowns per liter and diesel by 1.70 crowns. Now, within two weeks, gasoline will drop to 1.50 kronor while diesel a little less where it could approach the 39 kronor mark.
More pessimistic is the chief economist of BH Securities Štěpán Křeček, who predicts that fuel prices will only fall below 40 kronor, in particular, he mentioned that the krone remains relatively weak against the US dollar when it is above 23 kronor. Another factor that greatly affects prices is demand, as there is less demand in the world than expected. In the US, for example, fuel consumption is currently the lowest since the beginning of the year, while in China oil demand is growing more slowly.
Oil rises due to conflict
The price of oil was also plummeting before the weekend terrorist attack in Israel. At the beginning of September, a barrel of Brent oil from the North Sea, from which world prices are calculated, was still selling for 97 dollars (2255 Czech crowns), on the second Sunday in October it cost ten dollars less. Today, following the weekend attack on Israel by the Islamic movement, oil prices have soared. According to Investing.com’s server, on Monday at around 14:30 CET, North Sea Brent was worth USD 87.7 (CZK 2040), 3.7% higher than Friday’s value of USD 84.5.
“The conflict has had an effect on oil prices, but so far only moderate. At the moment it is not a direct threat to mining or transportation, but there is speculation about the impact on Iranian production,’ mentioned Tomčiak, the third largest exporter in the OPEC cartel after Saudi Arabia and Iraq. Currently, according to him, Iran produces three million barrels of oil per day. “Tehran is said to support the Islamic movement and the question is whether the West will impose further sanctions on it,” the analyst explained about the possible long-term risk in the global oil trade from an attack on Israel.
‘The volume of Iranian mining accounts for three percent of the world’s daily consumption. However, there is no information yet on the tightening of sanctions,’ Tomčiak added.
Sources: https://www.novinky.cz/
Image sources: https://www.novinky.cz/; Investing.com
Graphic sources: https://storyset.com/
