Fuel prices across the UAE are expected to decrease in June following a drop in global oil prices during the month of May. Global oil prices, specifically Brent crude, traded in the range of $82 to $83 a barrel in May 2024, averaging $83.35. This was lower than the previous month’s average of $88.79, with prices being subdued due to an abundant crude supply and weaker demand in Asia.
The Fuel Price Committee in the UAE revises retail petrol rates on the last day of each month to align with global crude prices as part of the country’s deregulation policy. In May, petrol prices were raised for the fourth consecutive month due to geopolitical tensions in the Middle East, leading to higher global rates. Super 98 petrol was priced at Dh3.34 per litre, Special 95 at Dh3.22 per litre, and E-Plus at Dh3.15 per litre, marking the highest prices in the past seven months.
Vijay Valecha, Chief Investment Officer at Century Financial, highlighted that oil prices rose earlier in the year due to Middle East tensions and output cuts by OPEC and its allies. However, prices have softened since early April due to ample supply outside the OPEC group and weaker demand in Asia. OPEC+ is expected to meet online to discuss rolling over production cuts into the second half of 2024, which could impact oil prices.
Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, noted that the current geopolitical environment, rising US demand, and OPEC’s restrictive stance could support further gains in oil prices. Additionally, China’s efforts to support its property market could also bolster oil and commodity prices. However, Ozkardeskaya pointed out a major risk to oil prices rebounding above $80 per barrel, which could be the potential waning of the reflation trade if central banks adjust their rate cut plans.
Looking at historical data, petrol prices in the UAE have fluctuated over the past year, with variations in prices for Super 98, Special 95, and E-Plus 91 petrol. These changes are reflective of the global oil market trends and geopolitical factors that influence oil prices. Consumers in the UAE can monitor these price changes and adjust their fuel consumption accordingly.
In conclusion, the expected drop in fuel prices for June in the UAE follows a downward trend in global oil prices, impacted by factors such as oversupply and weaker demand. The Fuel Price Committee’s regular revisions aim to reflect these global changes in local petrol rates, providing transparency and alignment with the international market. As oil prices continue to be influenced by geopolitical tensions and production decisions by major oil-producing nations, consumers in the UAE can anticipate fluctuations in fuel prices and adjust their budgeting and consumption habits accordingly. Stay informed with the latest updates on fuel prices to make informed decisions about your transportation costs.
