Fuel prices at gas stations have been falling since last week. What explains this price drop? Is an increase to be expected in autumn? An expert answers us.
That’s good news in the heart of summer. Although still high, fuel prices have fallen since last week. Less than 2 euros per liter. The average price at the pump is €1.861 per liter of unleaded 98, €1.807 for unleaded 95 and €1.816 for diesel, according to the average price in France recorded by the carbu.com website on Wednesday 10 August.
What drives prices at the pump are market prices for crude oil. A barrel of Brent oil was trading at $95 on Wednesday afternoon. They had risen to $139 a week after the start of the war in Ukraine, causing prices at the pump to rise to over €2 a liter.
Fear of a global recession
What explains the price drop? “In recent months fears of an oil shortage have fueled the rally. What is dominating the oil markets today is the fear of a global recession. We are not in a recession, but the markets are always in anticipation,” explains to The midi dispatch Francis Perrin, Associate Researcher at the Policy Center for the New South. “Markets see growth prospects being revised down, they see high inflation returning, they see central banks raising interest rates, and their reasoning is this: if there is a recession and a global economic crisis, the World use less oil, prices will fall, so we are already cutting crude oil prices.
Usually in summer, due to public holidays and numerous car trips to Europe or the USA, the increasing demand leads to rising prices at the pump. This is not the case this summer.
And in autumn?
What happens at the start of the school year in September: prices continue to fall or rise? Impossible to predict. What could affect the price development is the crisis between Iran and the United States. The European Union submitted a compromise draft to both sides this week. If a deal were found on Iran’s nuclear power, the Americans would lift part of their economic sanctions against Iran, which would allow Iran to produce and export more oil and, logically, lower prices at world level.