Fleeting hope pushes oil price below 100 dollars

Crude oil prices have been falling for a week. Another step down today pushed Brent crude below $100 per barrel. The market is drawing hope from improved supply from Saudi Arabia and renewed prospects of a peace agreement and the reopening of the Strait of Hormuz, although that hope appears fragile.A week ago, on Tuesday 15 September, the oil price closed above $108 per barrel. It has been falling ever since. At the time of writing (Tuesday afternoon, 22 September), Brent crude had dropped below $100 per barrel, to $98.59 to be precise. That represents a decline of more than 9%.DieselDiesel prices are also falling, but unfortunately for farmers, not as sharply. Besides the oil price, refining capacity also plays a role in diesel pricing. On 16 September, 100 litres (for deliveries of 4,000 litres or more) cost €203.05 (LTO member price). On 22 September, the price stands at €193.05.There is renewed hope for an end to the US-Israeli war with Iran. The oil market reacted to a report that Iran would be willing to reopen the Strait of Hormuz within a week, provided the US eases military pressure. That report has since been denied.Iranian President Masoud Pezeshkian will travel to New York this week for a UN meeting. Trump is sending conflicting signals. On the one hand, he says he is open to a meeting, while on the other, he is threatening once again to destroy the Iranian economy and Iran as a whole. Iran, in turn, is again threatening retaliation in the region.According to various news agencies, Saudi Arabia's East-West oil pipeline was partially brought back into operation today. The pipeline was shut down more than a week ago following a drone attack. Its swift partial reopening is a boost to the market, as there had been considerable uncertainty over the situation.The threat has not disappeared, however. Iran-backed Houthis in Yemen, for example, carried out attacks on Saudi Arabia last weekend. No damage or casualties were reported.Before the temporary shutdown, the 1,200-kilometre pipeline carried the equivalent of 4 million barrels of oil per day. Saudi Arabia has meanwhile been shipping more oil through the Strait of Hormuz. Reuters reported yesterday, citing satellite data, that an average of 2.9 million barrels of Saudi oil per day passed through the Strait of Hormuz over the previous six days, compared with an average of 700,000 barrels per day in August.GasGas prices are also falling on improved market sentiment. The market remains sensitive to developments around the Strait of Hormuz. Although LNG from Qatar mainly makes its way to Asia, greater availability – or the prospect of it – affects global prices. On Monday 14 September, gas on the TTF traded at €82.57 per MWh. At the time of writing, it stands at €71.59 per MWh, more than €10 lower.ElectricityDaily averages on the Epex Spot day-ahead market ranged from €46.74 per MWh to €223.94 per MWh last week. When there is little sun and wind, more expensive gas is needed for electricity generation.