Global Tensions and Bullish Signals Impacting Fuel Costs
United Arab Emirates – October 30, 2023
The United Arab Emirates’ Fuel Price Committee is set to announce the adjusted retail prices for petrol and diesel for the upcoming month of November on Tuesday, aligning local prices with the ever-fluctuating global oil market.
Over the past four consecutive months, the UAE has witnessed an incremental rise in petrol prices, primarily attributed to surging global prices, driven by heightened demand for crude oil. In October, these prices saw a slight uptick. As of the last recorded figures, Super 98 petrol stands at Dh3.44 per liter, Special 95 at Dh3.33 per liter, and E-Plus at Dh3.26 per liter, with diesel priced at Dh3.57 per liter.
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Since 2015, the UAE has adhered to a policy of harmonizing local fuel prices with international rates, resulting in monthly adjustments. However, the global oil market faced turbulence in October, largely due to the conflict between Israel and the Palestinians in the Middle East.
Brent crude oil prices experienced considerable volatility throughout the month, fluctuating between $90.9 and $84 in the first week. On October 19, prices surged to $92.38 per barrel before stabilizing somewhat lower at $89.54 per barrel by mid-day on October 30.
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Market analysts are pointing to several factors contributing to this oil market turbulence. Samer Hasn, a market analyst at XS.com, highlighted bullish signals and expectations that continue to influence oil’s ascent. He stated, “The National Bank of Canada believes that the US is no longer able to make further withdrawals from strategic reserves in order to reduce oil prices, which may keep inventory levels below the historical average.”
Commerzbank shares the view that oil prices might be bolstered by concerns over oil supplies remaining at elevated levels, especially in light of the ongoing Middle East conflict and the fears of its expansion. This sentiment is echoed by ANZ Bank, which also anticipates potential disruptions to the supply of global markets, with fears that around 20 million barrels of crude oil per day could be affected by the conflict.
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As the UAE prepares to announce the revised fuel prices for November, the nation remains closely tied to the global oil market, a relationship subject to the volatility and uncertainties of the broader geopolitical landscape. The forthcoming fuel price adjustments will be closely monitored by consumers and industries, as they are likely to reflect the intricate dynamics of the international oil market.
