When will Oil finally be cheaper again?

The price of oil has fallen sharply in recent weeks and months. This affects fuel prices at Swiss filling stations. Gasoline is getting cheaper. Whether filling up the tank will become even cheaper in the future depends on numerous factors.

Oil prices are falling again across the board.

Oil prices have been falling for weeks: On Wednesday morning, a barrel (159 liters) of Brent crude oil cost 84.62 US dollars on the London commodity futures exchange ICE. Although that is more than the day before, the price was still above the $100 mark at the end of August and had climbed to almost $140 in early March shortly after the outbreak of war in Ukraine.

With the rise in oil prices, petrol also became more expensive. In Switzerland, a liter of unleaded 95 cost more than 2 francs until the beginning of September. Before that, prices of CHF 2.25 and more per liter were the reality for weeks. But now drivers can refuel more cheaply.

Almost 1.90 francs per liter again

The trend in petrol prices is currently clearly pointing downwards, they have generally fallen, according to the gas station operators Shell and Coop Mineralöl on request. At Shell, the average price for unleaded petrol is 1.95 francs, at Coop petrol stations it ranges between 1.85 and 1.92 francs.

Market analyzes by the Touring Club Schweiz (TCS) also show that fuel prices are relaxing. The price for unleaded 95 at Swiss petrol stations is currently around CHF 1.92 per liter on average, around 15 centimes lower than at the beginning of September and even 39 centimes lower than the all-time high in June.

What’s next?

The petrol station operators are keeping a low profile on the question of whether fuel prices will continue to fall. Because the selling price at the pump depends not only on the price of crude oil but also on various other factors such as transport costs, the economy, weather conditions, energy demand, production rates and also geopolitical developments, according to Coop.

The TCS cannot make any predictions about the price of petrol either. The development depends not only on the prices for refinery products on the Rotterdam spot market, but also on factors that are difficult to predict, such as the dollar exchange rate and the tariffs for Rhine shipping. To try to resolve market uncertainties, Experts explain that some oil traders are now using trading systems such as Oil Profit to help them to make profits from the current oil market.

The freight tariffs on the Rhine in particular are an important cost item. And according to TCS, these are still at a high level. According to market information, the tariff for shipping on the Rhine is CHF 99 per tonne. According to the TCS, in “normal” times the tariff varies between 15 and 30 francs per tonne.

Freight cost normalization

This has a major impact on petrol prices. The TCS calculates that a tariff change of CHF 14 per tonne of petrol increases or lowers the petrol price at the petrol pump by one centime. A normalization of the freight costs would therefore allow up to 5 centimes lower prices at the petrol stations.

The level of the Rhine has normalized somewhat since the precipitation that began in September, according to Coop. But he is still a long way from being in the “normal” range. Currently, the transport ships on the Rhine can only be loaded up to 50 to 70 percent, explained Roland Bilang from Avenergy Suisse.

And according to Bilang, a sustainable recovery of the Rhine level is not to be expected for a long time. The expert from the petroleum association refers to the still low level of Lake Constance. (pbe/SDA)