The drop in refining prices, a sign of a return to normal on the oil market?

The phenomenon is observed on both sides of the Atlantic. OPEC notes that on the American market, the profit margins of major oil groups have fallen compared to the high levels recorded in September, due to lower seasonal demand for gasoline and diesel. The same in Europe on the Rotterdam market where prices are set on the Old Continent: refining margins have decreased significantly thanks in particular to better availability of crude oil.

Also read: True or false Does TotalEnergies really make “no margin” in France, as Emmanuel Macron says? Should we conclude that the situation is returning to normal on the oil market? Let's not move too quickly.

But this downward trend in oil refining margins shows a lull on two levels. First, there is less pressure on oil demand thanks to an improvement in supply. The situation is less tense at the moment in the Strait of Hormuz because Iran needs to sell its oil for simple reasons of economic survival.

And then there is the consumer attitude. Due to high fuel prices, all over the world, motorists have consumed less and been careful by reducing speed. This resulted in significantly less demand for crude, and therefore the need to refine the raw material less.

A recovery in demand anticipated by OPEC The management of strategic stocks also weighs in the balance. Global oil stocks reached their highest level in February and then fell in September. It is interesting to note that it is the non-OECD countries that have drawn the most from their stocks: China and the Middle East.

We will have to wait for the next few months to draw a general conclusion because OPEC is already anticipating a recovery in oil demand globally to keep the industry running. But this recent development in the market, marked by less consumption of crude oil, and therefore a drop in refining margins, highlights the impact of what economists call the “price signal”. High fuel prices encourage motorists to pay attention to their fuel consumption, a forced obligation, of course, but the proof is in evidence.

Machine-translated from French