February looks to be a month of ‘worry’ for motorists in South Africa as early petrol price estimates indicate a possible increase, almost as sharp as the drop in January 2022.
February petrol price: Why experts warn of an increase
According to weekly market analysis released by the Bureau for Economic Research (BER), the preceding week was the start of a surge for commodities and, already, Brent crude oil is on the up-turn, starting off this week’s trade with a 5% increase in market performance.
Supply disruptions brought on by the rampant spread of the Omicron variant in the Unites States (US) may lend a hand in fuel hikes expected to hit the pumps next month
“After some reprieve on the domestic fuel price front in January, the renewed rise in the oil price is likely to result in another hefty fuel price increase in February,” BER experts warn.
Petrol price estimates have yet to be released. Thus, at this stage, we can only presume that early indicators in crude oil’s market performance is a suggestion that preparations must be made for a fuel hike.
EIA analysis: Brent crude oil prices expected to decrease in 2022
This, however, is contrary to analysis made by the US Energy Information Administration (EIA) which forecasted, earlier this month, that “crude oil prices will fall in 2022 and 2023.”
“The declining prices are driven by a shift from global petroleum inventory declines during 2021 to inventory increases in 2022 and 2023. Global petroleum inventories decline when consumption is greater than production and increase when production is greater than consumption,” the EIA noted.
According to the administration, while in 2021, withdrawals from global petroleum inventories averaged 1.4 million barrels per day (b/d), they are expected to increase by 5.5 million on 2022. Much of this sharp rise in petroleum availability will be driven by production increases “in the United States, OPEC, and Russia, which together account for 84%, or 4.6 million b/d, of the growth.”
“We forecast that global petroleum consumption will increase by 3.6 million b/d in 2022, driven by more consumption in the United States and China, which together account for 39% of the consumption growth,” the EIA added.
Read the full EIA 2022-2023 crude oil price outlook here.