What will the future hold for fuel pricing in the UK? Watson Fuels recently hosted a webinar to help our customers understand key trends and dynamics affecting 2023 and beyond. In addition to a long- and short-term market outlook, attendees also got details on price risk management, renewable diesel and decarbonisation. Here’s a quick overview.
After the record volatility in energy markets in 2022, 2023 prices may seem steady. But several factors are still producing insecurity that we will be feeling for the foreseeable future. Nicole Leonard, Director of Energy Transition Consulting at S&P Global Commodity Insight, believes that volatility has shifted but not subsided.
The supply and demand data suggests tighter supply over this summer despite an overall bearish mood in the market. Oil production continues to grow around the globe, and gas inventories in Europe are above the six-year range, so the supply crunch that wreaked havoc in 2023 has been addressed in large measure. But now, with consumer sentiment running low, demand is the new risk to watch.
How can organizations with strict fuel budget guidelines navigate continued pricing volatility? Matt Whitton, VP of Supply for Land and Aviation Europe for Watson Fuels/World Fuel Services, shared his insights on price risk management strategies. Companies can hedge to protect against unfavourable changes in prices, removing the impact of market insecurity. Using a set volume over a set period of time, a fixed forward price (FFP) can give you budget certainty—but there is risk associated with this approach, so contact your account manager to discuss whether this solution makes sense for your business.
Decarbonising with renewable diesel
As we all work toward reducing our carbon footprints, reducing the emissions associated with our fuel use will become increasingly important. Matt explained the benefits of renewable diesel, a cleaner, more sustainable fuel with superior performance that doesn’t require a major investment of time or resources to switch to.
After the UK’s anti-dumping legislation was removed last year, barriers to importing products from places like the U.S. and China were eliminated, which increased the supply and availability of renewable diesel.
As part of World Kinect, Watson Fuels offers advisory services and products designed to support your journey to net zero. To learn more you can request access to the full webinar on-demand, or to speak to our experts about any of the topics covered, please contact us below: