Will Gas Prices Finally Drop in June?

Could Gas Station Prices Drop in June?

In the United Arab Emirates, many people's attention turns to fuel prices at the end of each month, as new prices have been announced monthly since the 2015 deregulation. In May, there was only a one fils per liter increase, resulting in prices of Dh2.58 per liter for Super 98, Dh2.47 for Special 95, and Dh2.39 for E-Plus 91; however, a slight price decrease might be possible for June.

The reason for this is that in May, the average price of Brent was $63.6 per barrel, compared to the previous months' average of $66.6. The WTI Crude and Brent prices are also currently moving at a lower level: the former is around $61.44, and the latter is around $64.68 per barrel. Considering the upcoming OPEC+ decision, which is expected to include further production increases, the pressure on the oil market might continue, which could further strengthen the price drops felt at gas stations.

This year began with strongly fluctuating prices: Brent opened at around $74.93 at the beginning of January, then surged to $82.63 by mid-January, while by early April, there was a sharp drop to $58.40. By the end of May, the market somewhat corrected, but it still remained nearly 20% below the peak at the beginning of the year.

Official prices for June will be announced at the end of the month, but based on current market signals, consumers can hope that they will have to pay less at filling stations next month. This would especially ease the burden on cost-sensitive citizens and the logistics and transportation sectors, as these sectors are directly affected by changes in fuel costs.

Why is all this important?

The fluctuation of fuel prices affects not only individuals' wallets but also the competitiveness of the transportation, freight, and commercial sectors. In countries like the UAE, where oil prices are factors observed globally, the monthly announcements always excite both the market and the public.

(The article is based on a forex analysis.)