In the backdrop of the ongoing conflict between Israel and Palestine in the Middle East, global oil prices have witnessed fluctuations in the month of October.
This situation has prompted market analysts to evaluate the potential impact on fuel prices in the United Arab Emirates.
UAE’s Fuel Price Committee to Announce November Rates
The UAE's Fuel Price Committee is set to announce revised retail petrol and diesel rates for November. These adjustments are made to ensure that local prices remain in line with global rates. The UAE has maintained a practice of aligning local fuel prices with global market rates since 2015. As a result, fuel prices are revised at the end of each month to reflect changes in global oil prices.
Increased Fuel Prices in Recent Months
Over the past four months, the UAE has consistently raised petrol prices due to higher global oil prices. Increased demand for crude oil on the global market is what has driven this trend. In October, retail gasoline prices saw a slight increase. Currently, Super 98 petrol is priced at Dh3.44 per liter, Special 95 at Dh3.33 per liter, and E-Plus at Dh3.26 per liter. Diesel is available at Dh3.57 per liter.
Global Oil Price Fluctuations in October
Throughout the month of October, the Brent crude oil price exhibited fluctuations. It ranged from $90.9 to $84 in the first week of the month, then surged to $92.38 on October 19, before settling slightly lower at $89.54 per barrel by mid-day on October 30. The ongoing conflict in the Middle East had an impact on these price variations.
Expectations of Oil Price Increases
Market analysts have identified several factors that support the expectation of rising oil prices. The National Bank of Canada has suggested that the United States may be unable to further tap into its strategic reserves to reduce oil prices. This limitation could potentially keep inventory levels below historical averages.
Commerzbank has also expressed worries that issues with oil supply levels might support oil prices, particularly in light of the ongoing Middle East conflict. Fears of the conflict's expansion further contribute to these concerns. ANZ Bank shares similar sentiments, noting that an escalation of the conflict could disrupt the global oil market's supply, affecting approximately 20 million barrels of crude oil per day.
As the UAE awaits the announcement of revised fuel prices for November, the situation in the Middle East and its impact on global oil markets will continue to be closely monitored.
