Why have fuel prices been falling in recent weeks?

Margaux Fodéré, edited by Laura Laplaud
modified to

10:38 a.m., August 05, 2022

For the past few weeks, the price at the pump has been falling at your service stations. In one week, the liter of diesel went from 1.95 euro to 1.87 euro on average. Obviously counting the rebate of 18 euro cents from the State. A drop which is due to the price of oil, which is falling.

Prices at the pump have been falling for a month. Including the rebate of 18 euro cents from the State, in one week, the price of diesel went from 1.95 euro to 1.87 euro on average. An evolution which is explained by the price of oil which decreases.

The rise in oil supply

This decline is related to several factors. First of all, there is the increase in the supply of oil, which makes it possible to ease the pressure on prices. An increase which comes both from the side of the United States which draws on its reserves, but also from the side of the OPEC countries which one suspected that they would announce Wednesday an increase in their production.

The drop in demand

Then there is the drop in demand for oil which is pulling prices down, as explained by Philippe Crevel, economist and director of the Cercle de l’Épargne. “The slowdown in the world economy, which is clear, has been highlighted by the IMF, by the OECD and in particular by China, which is the second largest consumer of oil in the world.”

“Chinese growth is weakening day by day and this is putting less pressure on oil demand, so it is contributing to lower prices,” he continues.

The slight rise of the euro against the dollar

Finally, in recent days, the slight rise in the euro against the dollar has reduced the price of products imported into Europe. This is the case of oil purchased in dollars. At this stage, it is difficult to say whether this decline will last, because if European countries decide to completely deprive themselves of Russian oil and gas, prices could rise again.

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