"The powerful hurricane Florence, which is approaching the coast of the United States, should not affect fuel prices. Unfortunately, drivers in Poland still have to prepare for more expensive fuel due to rising European oil prices and an explosion in the German refinery," writes Marcin Lipka, Conotoxia Senior Analyst.
Hurricanes that strike the United States often affect energy commodity prices around the world. This time, however, changes in the fuel and oil markets should not depend on destructive elements.
The U.S. Energy Information Administration (EIA) maps show that the path of the hurricane, which is to hit mainly the coasts of South and North Carolina, is very far from refineries and oil rigs, located mainly off the coast of the Gulf of Mexico.
The pipeline that carries diesel and gasoline from the Gulf of Mexico to New York harbours may be within reach of the hurricane. Although the likelihood of damage seems to be limited there as well. The pipeline is quite far from the coastline and is unlikely to be affected by the elements.
Unfortunately, Polish stations will not escape the increase. Although they will not be spontaneous, higher prices must be expected by drivers who use diesel.
Consequences of the Iran blockade
The price of a barrel of Brent crude oil has risen close to the 80 USD limit, which is due, among other things, to a significant decrease in production from Iran. It fell by 250,000 barrels per day (b/d) in one month and in August it amounted to 3.5 million b/d.
Despite the fact that the U.S. sanctions against Iran will only come into force in November, according to Bloomberg, South Korea has already reduced its oil imports from Iran to zero (in July it was 200,000 and in March even 400,000 bpd). This and other countries will, of course, look for oil supplies from alternative sources raising global prices.
A certain paradox is also the fact that the difference between European (Brent) and American (WTI) oil has increased to about 10 USD per barrel due to the expected further reduction in production from Iran (even below 3 million b/d). Europeans or Asians pay much more for "black gold" than Americans, although the USA has introduced sanctions against Iran. However, the United States, thanks to the shale revolution, is less dependent on the global situation and, additionally, does not have an extensive infrastructure for oil exports, which would equalize prices in both markets.
An explosion in the refinery does not help. Diesel to be the same price as petrol
High Brent oil prices are also increasing pressure on fuel costs. This applies in particular to diesel, one litre of which reached the level of 2.25 PLN at the beginning of September in the European ARA market (Amsterdam - Rotterdam - Antwerp). This is the highest level in less than 4 years.
In addition to Iranian issues, it is also worth mentioning the explosion at the German refinery located near Ingolstadt. A spokeswoman for Bayernoil, quoted by the media, said that it might take weeks to get back to work at the refinery. Although this is not a particularly large plant (120,000 b/d), the problems occuring in Germany are increasing prices in an already volatile European market.
As a result, in the coming days we can expect an increase in the cost of filling up, mainly with diesel. According to the European Commission data, at the beginning of September diesel oil in Poland cost 5.02 PLN per litre on average. It cannot be ruled out that in the second half of the month the limit of 5.10 PLN/litre will be crossed, which will mean that at Polish petrol stations diesel will be at its highest price for 4 years. As a consolation, however, unleaded petrol should not significantly change and will probably remain close to the level of 5.10 PLN, this is around the values from the start of September.