File picture: Waltraud Grubitzsch / dpa via AFP.
After hitting two-month highs last week, international oil prices edged lower this week as the latest Middle Eastern developments eased fears of a wider conflict.
Brent Crude oil tumbled by 5% to reach a low of $73.52 (R1,290) per barrel on Tuesday after reports indicated that Israeli Prime Minister Benjamin Netanyahu told US President Joe Biden that his country did not plan to strike Iran’s crude or nuclear facilities.
According to AFP, economic factors also helped to soften oil prices as the lack of new stimulus announcements from China have fuelled concerns about softening demand in that country.
This after Brent Crude prices hit $80 last week, the highest level since August, after Iran’s retaliatory missile attacks on Israel sparked fears of a wider conflict in that region.
"With the geopolitical risk-premium falling, prices are once again being led by the struggling demand picture," equity analyst Matt Britzman told AFP.
Unfortunately, the softer oil prices we’ve seen this week are unlikely to ward off a fuel price increase in South Africa in November, although it will certainly soften the blow if markets remain at their current level.
The latest daily snapshot released by the Central Energy Fund shows a month under recovery of 17 cents for 95 Unleaded petrol and 16 cents for 500ppm diesel, while the latest daily numbers are in the red to the tune of 56 cents for petrol and 36 cents for diesel, meaning the under recovery could still grow between now and month-end.
IOL
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