Oil the cheapest in years, and fuel prices still at 6 PLN/l. When will it be cheaper at gas stations?

On April 9, the price of a barrel of WTI oil reached $55.67 per barrel, which is the lowest price of oil since the outbreak of the COVID-19 pandemic! Drivers can already rub their hands, because as the expert Urszula Cieślak from Reflex told us in an interview, the first drops may be before the holidays. However, overall, we have no reason to be happy.

Oil prices are falling after the decisions, but there are still no changes in sight at petrol stations in Poland

Donald Trump’s trade war is causing a shake-up in the markets, including the oil market. As fuel market expert Urszula Cieślak from Reflex.com.pl told us in an interview , the imposition of high tariffs has caused a sell-off in the oil market . Will the decision to temporarily withdraw tariffs (with an increase to 125 percent for China) change anything?

– The tariff war between the United States and China is already escalating significantly, so this is also key for the oil market, because it may determine a drop in demand for oil and finished fuels. Considering this rapid variability of the market reaction, we are not able to predict this [maintaining low oil prices – editor’s note]

As the expert emphasizes, much depends on the negotiations on the suspended tariffs. However, fears of a recession in the United States, lower demand for oil on the world market, and simultaneous decisions to increase production by OPEC+ countries from April to May, may create a risk that oil prices will not grow rapidly.

When Will Fuel Prices Drop? Reduction Possible for Christmas

In a conversation with us, Urszula Cieślak from Reflex.com.pl explained that changes in oil prices translate to the wholesale market almost immediately, taking into account fuel price quotations on the European market and currency fluctuations. However, changes on the retail market usually take time.

– We are now in a situation where wholesale prices have fallen rapidly over the last five days, which has resulted in cheaper crude oil. However, given the fact that wholesale prices were rising earlier, and the increases at petrol stations after the earlier increases in wholesale did not translate, we are also waiting longer for price reductions at petrol stations – explains the expert.

In this case, it is not important for the market how much prices will fall, but whether the low price level will be maintained,  then we can count on a permanent downward correction at the stations.

–  I think we will see the first corrections [of prices at petrol stations – editor’s note] by the end of the week. However, if there is no sudden rebound on the market, i.e. wholesale prices do not start to rise, then we should be able to refuel cheaper at most petrol stations for the holidays –  said Urszula Cieślak from Reflex.com.pl .