UAE: Will Petrol Prices Drop in March 2025 Following Global Oil Price Decline?
Petrol prices in the UAE are expected to decrease in March 2025, following a decline in global oil prices observed in February.
Brent crude, a major global benchmark, averaged $75 per barrel in February, down from $77.55 the previous month. This price drop is attributed to several factors, including a decision by the Organisation of the Petroleum Exporting Countries (Opec+) to gradually increase oil production starting April 1, 2025.
In the UAE, fuel prices have already been set for March 2025, with Super 98 priced at Dh2.74 per litre, Special 95 at Dh2.63, and E-Plus at Dh2.55. The fluctuation of US crude oil inventories has added further pressure to the energy market, with increased reserves reinforcing concerns of a short-term oversupply. This development has prompted traders to scale back their positions in the futures market, contributing to a decline in West Texas Intermediate (WTI) crude prices.
Market analysts suggest that the ongoing volatility is largely influenced by the strength of the US dollar, which makes oil more expensive for international buyers, thereby affecting demand. Additionally, macroeconomic factors such as US Federal Reserve policies and interest rate expectations are playing a role in the decline of oil prices.
Antonio Di Giacomo, senior market analyst at XS.com, noted that the drop in crude prices reflects investor uncertainty regarding Opec+'s planned increase in production. 'Although this decision was anticipated, its impact has been significant, exacerbated by a stronger dollar and rising US inventories,'
Di Giacomo said.
Vijay Valecha, chief investment officer at Century Financial, highlighted that hedge funds have become less optimistic about oil's prospects, trimming their bullish bets. Valecha also pointed to concerns over potential US tariffs and geopolitical tensions, particularly related to the war in Ukraine, which could further disrupt market dynamics.
As the global energy market continues to adjust, investors and industry stakeholders will closely monitor Opec+'s actions and key economic indicators to gauge the future direction of crude oil prices.
News Source: Khaleej Times
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