The extraordinarily steep decline in Brent Crude from $115 per barrel last June to $45 per barrel by mid-January was predicted by very few (if any) analysts, traders or oil companies, tempting the same scribes to pen their best guesses for 2015. The recent Bloomberg headline which read "analysts are now united in their view of crude oil prices going forward" it will be somewhere in the range $30 to $200 per barrel, neatly summarised these guesses.
Having attended part of International Petroleum (IP) Week, organised by the Energy Institute in London from February 10-12, there seemed almost a consensus that a glut of oil was overhanging the market because of excess supply versus demand and that this situation would prevail for most, if not all of this year. The economic logic, given Saudi Arabia’s pricing stance, was overwhelming.
Meantime, even as IP Week was in full swing, the price of Brent Crude was moving in a contrary direction steadily upwards beyond $60 per barrel by Friday 13 how or why did that happen?
Likewise, wholesale costs had increased quite rapidly with petrol up by nearly 5.5ppl from January 27 to February 16. However, the UK average pump price for petrol had moved by less than 1.5ppl over the same time period.
This once again demonstrated that the Office of Fair Trading was probably correct in findings of its report into the road fuels market that there is no evidence of the "up like a rocket and down like a feather" pricing myth promoted by certain motoring organisations and red top tabloids.
Independents are again holding fire on prices while certain supermarkets enjoy the last hours of their two-week lag. Will we have strident press releases from them announcing the necessary 2ppl to 4ppl pump price increases? No prizes for your answers.
With these confused and confusing price signals, road fuel pricing in the UK remains volatile. My one (foolish?) prediction for 2015 is that we have seen the bottom of the crude oil price crash so the only way now is an upward trend for pump prices. It is never easy pushing the price boulder back uphill, but at least this or the next government may be less tempted to ramp up fuel duty from the present 57.95ppl.