The good news for Slovak motorists does not end there. The reduction in fuel prices at our gas stations should continue at the end of November. As J&T Bank analyst Stanislav Pánis told the SITA agency, oil recorded its fourth week of losses in a row, which brought it to four-month lows. “Therefore, we expect the prices of 95-octane gasoline and diesel to fall below 1 euro and 60 cents,” Pánis added.
365.bank analyst Tomáš Boháček also expects a drop in prices at Slovak gas stations. “At least until the next week, we again assume that the price of fuel will continue to fall, and it is not excluded that the prices will also reach the level before the summer of this year,” said Boháček.
In the 45th week of this year, the average price of fuel at our gas stations decreased again week-on-week. The price of natural 95 and 98 octane gasoline fell by almost 4% and 3% respectively in the monitored period. Natural 95 is thus sold at an average price of 1.587 euros per liter and natural 98 at 1.8 euros per liter, i.e. at prices from the beginning of July this year. The price of diesel fell by 1.2% and a liter was sold for an average of 1.627 euros per liter. “On one full 50-liter tank, we were able to save, for example, up to 4 euros compared to the end of September,” added Boháček.
Oil prices fell last week, with benchmark WTI trading below US$73 a barrel at times and Brent crude trading briefly below US$78. These are the lowest levels since mid-summer. Despite Friday’s rebound for the week, North American WTI crude lost nearly two percent to close just below $76 and North Sea crude surrendered nearly one and a half percent to close just above the $80 level.
“Behind the continued decline in oil is the continued publication of unfavorable macro data, which speak of a slowdown in global economic growth, which implies a slower growth in demand for the commodity. The opening of large speculative positions of hedge funds for a drop in prices also contributes significantly to the decline in oil prices, which OPEC pointed out in its monthly report. This further deepens the negative sentiment on the oil market,” said Pánis.
In addition, according to him, supply factors also push oil down, where although the OPEC+ association limits production, this is compensated by the growth of production outside this cartel. US production has been at a record high of over 13 million barrels per day for some time, making it by far the world’s largest producer. According to Pánis, the growth of mining can also be seen in the case of Canada or Brazil. “And it is the combination of a well-supplied market thanks to non-OPEC+ countries and weaker seasonal demand for oil that translates into downward pressure on oil prices,” stated Pánis.
Next year, OPEC continues to expect an increase in demand by 2.25 million. barrels per day. According to Boháček, this is positive information for oil prices, but only from a long-term perspective. “According to OPEC top officials, the recent drop in oil prices is speculation on the part of traders. We should learn more detailed information about the cartel’s point of view next Sunday, when a meeting with the evaluation of mining quotas is planned,” said Boháček.
In a broader context, market players assume that next year, according to Pánis, the oil market will reach a greater balance and even a surplus with the expected increase in stocks if OPEC+ does not agree on extending or deepening production cuts. “And there are already whispers about the possibility of further cuts, which should limit the further drop in oil prices,” concluded Pánis.