Red diesel drops below 80p/litre with weak demand on farm
© Tim Scrivener Wet autumn conditions limiting demand and plenty of supply have capped red diesel prices in recent months, according to traders.
Oil markets have dropped back from September highs with Brent crude at US$82/barrel (£66) on 15 November.
Red diesel prices were about 78p/litre on 14 November, according to agricultural analytics firm Yagro, with prices ranging from 61p/litre to 99p/litre in the past 12 months.
See also: Fuel price outlook: Red diesel steady but volatility remains
Neil Cooper, marketplace manager at Yagro, said agricultural market demand had slowed somewhat due to wet weather conditions, and because of widespread flooding, some potato and beet crops were likely to go unharvested.
“Red diesel prices have eased since the September highs by 10-12%. Looking to the spring, that could lead to a higher-than-expected demand for fuel on farm, which could have an effect on farm prices,” said Mr Cooper.
“Beyond the farm gate, there is confidence that interest rates have peaked for the time being. On the back of that, Brent crude prices have been creeping up recently, driven by both Chinese and US markets and buoyed by expectations of stronger global consumption in 2024.”
Rix Petroleum managing director Duncan Lambert told Farmers Weekly fuel markets had been down despite the conflict in Israel and have continued to fall.
Mr Lambert said there had been some daily spikes in the past week but, generally, prices were down, with demand from agriculture slowing due to the wet ground conditions.
“People are filling up tanks for winter, but with the cost of living many people have been filling up smaller volumes and making repeat orders,” he said.
Prices up at fuel pumps
Petrol and diesel prices at fuel stations have increased by 11.1p/litre and 13.9p/litre, respectively, since May 2023, according to the Competition and Markets Authority (CMA).
The CMA reported that although crude oil prices had risen during the summer months, wholesale prices had dropped during September and October, despite retail prices staying high.
Sarah Cardell, CMA chief executive, said: “Drivers are feeling the pain again as petrol prices at the pump have been on the rise since June.
“The underlying data shows a mixed picture in terms of what is driving this. Over the summer we saw rising wholesale costs, but more recent trends give cause for concern that competition is still not working well in this market to hold down pump prices.”