How does Brexit affect oil prices?

Oil prices seem to have processed Brexit

Oil price development

After oil prices fell significantly after the results of the Brexit referendum were announced, they are beginning to recover slightly. In their assessments, market participants are beginning to relate a possible decline in the demand for oil in Europe to other factors on the world markets.

The opinion seems to be emerging that the possible decline in European demand should be classified as negligible.

Increased US demand and declining US oil stocks are attracting more attention.

Current oil prices on the London commodity futures exchange ICE:

The European oil price index Brent has again taken the 50.00 US dollar mark per barrel and appears to be holding it.

ICE Gasoil, the key indicator for the domestic heating oil price, is currently being traded for delivery in July at just under 450 US dollars per barrel and is thus 10 US dollars more expensive than the day before.

Yesterday the Department of Energy (DOE) announced its assessment of the US oil inventory change.

Crude oil and distillate inventories decreased as refinery utilization increased, while gasoline inventories showed an increase. It is not uncommon for the refineries to increase their capacity utilization in the summer months, as there is more demand, especially for fuels. That's why the structure of the petrol was a bit surprising. Nonetheless, overall demand for oil products in the USA rose in the reporting week.

This contrasts with the expectation that global supply could continue to decline. Canada is back in the normal range of production after the adorable forest fires and Nigeria is also delivering again, but other producers are at the limit of their short-term possibilities or even in decline. Iraq has been reporting declines in oil exports for two months.

An impending strike in the Norwegian oil industry is also part of the short-term oil price forecast.

Development of the euro exchange rate

This morning, a euro cost below $ 1.11 again and was unable to maintain its Wednesday high of up to $ 1.1130. The ECB (European Central Bank) set the euro reference rate yesterday at 1.1090 dollars.

Today the markets are supplied with numerous economic data. Some inflation figures are published for the euro area and the monthly labor market report for Germany. Labor market data also follow from the USA in the assessment of the purchasing managers.

Development of heating oil prices

A 3,000 liter standard heating oil delivery currently costs around 52.70 cents per liter of heating oil on a nationwide average.

Our recommendation iscurrent: Anyone who needs heating oil in the next few weeks should watch carefully over the next few days whether the oil price slides back below the US $ 50 mark or continues to rise.

If you want to be on the safe side, you should buy heating oil now. Buying a smaller amount can also be worthwhile in order to speculate on price declines in the second half of the year. These are quite possible. Last year, too, a sharp rise in oil prices in the first half of the year was followed by a clear countermovement in the second half of the year.

In any case, we recommend that you use our service for regular price notifications or create a desired price. So you can benefit from price drops and order cheaper heating oil.