The oil price started the year relatively low.

On Wednesday, it even traded at times below 80 dollars a barrel (159 liter barrel) for the North Sea Brent, before there was a countermovement.

In the first week of trading alone, the price fell by a good 8 percent.

According to Commerzbank, that was the sharpest drop in price in a first week of trading since 2016. Oil had cost more than $100 in the summer and almost $130 in March.

Kerstin Papon

Editor in Business.

  • Follow I follow

Christian Siedenbiedel

Editor in Business.

  • Follow I follow

This recently fueled hopes of lower energy prices for consumers as well.

According to figures from the Heizoel24 Internet portal, to which 500 oil traders report their prices, the price of heating oil fell to 114 euros per 100 liters.

That was the lowest value since February last year.

Until the turn of the year, the price was above 120 euros, and in March it was even more than 200 euros.

Fuel prices fall on a weekly basis

Fuel prices have also fallen.

As the ADAC car club reports in its weekly evaluation of the prices of 14,000 gas stations, the price for Super E10 fell by an average of 3.6 cents to 1.707 euros per liter on a weekly basis, and by 3.9 cents to 1.811 euros per liter for diesel .

The car club cites the decline in the price of crude oil as the most important reason;

but the somewhat weaker exchange rate of the dollar to the euro is also having a positive impact on consumers.

Slightly lower energy prices had already brought some relief to inflation in the past few months.

The inflation rate in Germany fell from 10.4 to 10 percent in November;

the price of oil played a role in this.

In December, the rate fell further to 8.6 percent;

but that was mainly a result of government intervention – the government taking over the natural gas discount in December.

For January, economists are now expecting a higher inflation rate again;

albeit not with two-digit values.

"Despite the recent declines, the prices for fuel and heating oil are still as high as they were in mid-December when the statisticians collected the inflation data," says Jörg Krämer, Chief Economist at Commerzbank: "Therefore, mineral oil prices should not depress inflation in January to any appreciable extent again .”

Most of the analysts' forecasts for the oil price this year are still rather high anyway.

However, oil prices are always difficult to predict over a long period of time.

In a survey conducted by the FAZ among around a dozen financial companies, they expect an average price of 92 dollars per barrel of North Sea Brent oil in the middle of the year and at the end of the year.

Bank J. Safra Sarasin issued the lowest forecast for the end of the year at USD 77, the highest at USD 110 a barrel from UBS, ING and Berenberg.

The investment bank Goldman Sachs expects Brent to be worth $100 a barrel by mid-year and $105 by the end of the year.

Demand from China is likely to be one of the important criteria on which the further development of the oil price depends.

"We assume that oil prices will rise when the current wave of infections in China has passed its peak and economic activity increases," says Carsten Fritsch, oil specialist at Commerzbank.

Oil embargo shows first effects

The European Union has had an embargo on Russian oil imported by sea since December 5, and the G7 countries have imposed a price cap.

In addition, since the beginning of the year, no Russian oil has flowed through the pipelines to the Schwedt refinery in Brandenburg, for example.

This refinery is said to be currently at about 50 percent capacity due to replacement deliveries via the Baltic Sea port of Rostock, and a delivery of Kazakh oil is expected later.

Contrary to what some feared, the embargo and price cap have not yet led to a significant shortage of crude oil on the world markets with sharply rising prices.

On the contrary: China and India, some of which step in as oil buyers for Western countries, are apparently using their good negotiating position to negotiate low prices with Russia.

"Urals, one of the Russian oil benchmarks, is currently trading at $43 per barrel and is therefore far from the upper price limit of $60 per barrel," says Cyrus de la Rubia, oil specialist at Hamburg Commercial Bank.

Since the price cap came into effect, the price of Urals has fallen significantly more than the general price of oil.

In any case, the EU embargo makes it more difficult for Russia to find alternative buyers, reports Giovanni Staunovo, an oil expert at the Swiss bank UBS.

US Treasury Secretary Janet Yellen also describes the price cap on Russian crude oil as a success.

After about a month there was "early progress" on the two goals of limiting Russia's revenues while keeping Russian oil on the world market, Yellen said before a meeting with her Canadian colleague Chrystia Freeland.

Apparently, other countries used the upper limit to import Russian oil very cheaply.

The next step should now be an EU import ban for Russian oil products, including diesel, for example.

It will come into effect on February 5th.

"Since the market participants are preparing for this changeover, a sudden increase in diesel prices is not to be expected," says oil expert de la Rubia: "But this event should not go unnoticed on the diesel markets." After all, Germany last year had around 18 percent of the diesel requirement covered with imports from Russia, the EU 11 percent.

Despite the recent decline, diesel still costs more than it did immediately before the Ukraine war in February.

The difference is currently around 11 cents per liter.

Super E10, on the other hand, is now even cheaper than it was back then.

However: Compared to previous years, the prices for both types of fuel are still high.