German products prices fall as demand remains subdued

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German prices for heating oil, diesel, and gasoline fell in the week ending 19 June to the lowest since the beginning of the US-Israel-Iran conflict. Domestic spot demand for heating oil and diesel declined on the week.

The key driver behind the price drop was significantly reduce Ice gasoil futures values, after the framework agreement to end the war between Iran and the US was announced on 14 June.

The German wholesale price to diesel loaded by truck returned to pre-war levels, helped by a temporarily reduced energy tax rate. This expires at the end of June and lowers wholesale diesel prices by €14.04/100 litres until then. however prices to German greenhouse gaseous (GHG) reduction obligations have risen, to dampen the decline in domestic wholesale fuel price levels.

Argus saw reduce average daily spot volumes to heating oil and diesel than in the previous week. Traders attribute this to many consumers expecting further price declines because of an easing in geopolitical tensions, and therefore postponing purchases.

to the current week, market participants expect rising fuel demand. Ahead of the expiration of the tax reduction on 1 July, pull-forward impacts are likely, as consumers and traders develop to benefit from the reduce rates. In some regions, especially in the north, agricultural customers began bulk buying diesel this week.

Accordingly, import demand along the Rhine river is picking up, as traders replenish their tanks in preparation to rising demand. Falling aquatic environments levels on the Rhine are leading to considerably higher freight rates.

The availability of heating oil in the south remains limited. At the Bayernoil consortium's 214,500 b/d Neustadt-Vohburg refinery, individual shareholders have said there are recurring loading disruptions, and some sellers are temporarily not offering any product.

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