We are becoming concerned that the price of fuel is rising at a very considerable rate, and that this may have impact on customer operations.
It is important that we keep you informed and provide advice based on our expectations, so you can plan ahead to prepare and manage your business for this eventuality.
What has happened
OPEC (the Organization of the Petroleum Exporting Countries) and its allies are planning lower than predicted production increases. This is impacting supply and costs.
In November, production will increase by 400,000 barrels of crude oil per day, however the market was anticipating this to be between 800,000-1 million barrels a day. The ‘oil cartel’ wants to keep the crude market in deficit until the end of November 2021.
This smaller than anticipated increase has caused Brent Crude to rise above US$80 a barrel. The actions of OPEC and the cartel may inadvertently cause oil prices to go even higher.
Pricing pressure is also coming from energy commodities soaring in recent weeks due to high demand from world economies emerging from lockdowns. A global shortage in natural gas has flowed through to the oil market as Asian customers switch back to crude oil products.
What you need to know
As the shortages and price increase will also push onto lubricants, we suggest you order in advance to avoid these impacts.
After favourable growing conditions, a large Australian harvest is anticipated starting in November through to January 2022. We are advising that it would be prudent to fill tanks now, both to keep ahead of price rises and to avoid shortages at critical times should there be supply shortfalls, especially in diesel supply.
We are in constant contact with our supplier, Viva Australia’s Geelong Refinery, and have increased our estimates for product demand for the coming harvest.
Further information and orders
We hope this information will assist with your fuel management for the coming months.
Please contact our team with any questions, to discuss your needs or to bring forward any orders.
We’re here to help in any way we can.