Global oil prices are likely to decrease during the remainder of this year despite high energy demand, though they remain prone to fluctuations resulting from geopolitical conflicts and economic adjustments in large economies, says Star Petroleum Refining Plc.
The drop in prices will be the result of a surplus among major oil suppliers, said Sakchai Thamsuruk, manager for supply and planning at Star Petroleum Refining.
The oil industry is waiting to see whether Saudi Arabia and Russia will cut the supply of crude oil by 1.3 million barrels per day. If they decide not to do so, there will be a surplus of oil in the global market, he said.
Mr Sakchai said there is always strong demand for oil during the winter as many people need more energy to keep their homes warm, but the demand should be similar to past years.
The result is demand will not exceed supply, he said.
The conflict between Israel and Hamas is not near major oil sources, though the attacks could affect oil transport near the disputed area of Gaza, said Mr Sakchai.
The economies of the US and China are being monitored as they could affect oil demand during the last two months of the year, he said.
Given these uncertainties, oil price fluctuations could occur, said Mr Sakchai.
In the global market for refined oil, demand for jet fuel is around 80% of the volume consumed prior to the pandemic in 2019.
Prices for various fuel types are displayed at a petrol station on Tuesday November 7, 2023. Somchai Poomlard
Demand for diesel will increase from Western nations during the winter months, he said.
Gasoline supply should not tighten despite a decrease in gasoline exports from China because people tend not to drive as much during the winter months, said Mr Sakchai.
In Thailand, the prices of gasohol 91 and gasohol 95 have decreased four times since Nov 1, declining from 37.98 and 38.25 baht a litre to 34.48 and 36.25 baht a litre, respectively, within 10 days, according to the Energy Policy and Planning Office.
One factor is the state's policy to reduce the prices of gasohol, a mix of gasoline and ethanol, which took effect on Nov 7 and are slated to continue until Jan 31, 2024.
Authorities are keeping the price of diesel below 30 baht a litre and capped liquefied petroleum gas (LPG) at 25.87 baht a kilogramme, compared with the market price of 33.21 baht a kg.
The government is spending money from the Oil Fuel Fund to subsidise LPG by 7.34 baht a kg and diesel by 2.76 baht a litre.