In brief

• Oil prices rose after two sessions of declines, as investors watch tensions between the USA and Iran.
• Saudi Arabia and Iraq increased output, and the International Energy Agency recorded a rise in inventories.
• For carriers and fleet owners, future fuel prices remain difficult to predict.

Oil prices rising again

Crude oil prices are rising again after two earlier sessions of declines (Zwrot na rynku ropy naftowej. Bliski Wschód zwiększa dostawy – RMF24). Investors are assessing how the conflict between the United States and Iran may develop. This uncertainty is driving the market.

Supply rises, but the market remains nervous

In October, Saudi Arabia raised output to 10 million barrels per day, and Iraq produced 4.6 million barrels per day, the most in seven years. Exports from the Persian Gulf reached 74 percent of their pre-war level, although Iran is attacking tankers in the Strait of Hormuz. In October, for the first time since June, the International Energy Agency recorded a rise in commodity inventories.

The agency estimates that next year the surplus will grow significantly.

On Thursday, prices fell to their lowest level in two months. Brokers pointed to rising production in the Middle East and a relative easing of military activity (Ceny ropy najniżej od dwóch miesięcy. Arabia Saudyjska zwiększyła wydobycie o 26 proc. – Bankier.pl). The later upward move, however, shows how sensitive the market remains to news from the region.

What it means for carriers

For transport companies and fleet owners, the direction of fuel prices remains hard to predict. Rising crude prices usually feed through to wholesale fuel prices, which eventually reach petrol stations. The relief that some drivers hoped for in recent days may therefore prove short-lived.

What's next

The direction of prices depends on how the conflict develops and on whether the increase in OPEC output is sustained. Until the oversupply is confirmed in subsequent data, the market will react to every piece of news from the region.

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