Week ending 31st January 2025 - - Partner Blog Post from Fuelmate
Crude oil prices are set for their second consecutive weekly decline since the start of the year despite staging a partial recovery in anticipation of President Trump’s imposition of tariffs on the biggest crude suppliers to the U.S. this weekend.
Even with two consecutive weekly losses, crude oil is set for a monthly gain, with Reuters estimating that at 3.6% for Brent crude—the highest monthly gain since last June 2024.
Donald Trump threatened he would hit Canada and Mexico with 25% tariffs from February 1 unless they address his grievances concerning illegal migration and fentanyl smuggling. Canada has threatened retaliatory moves including halting electricity exports south of the border.
Some believe that the tariff threats are nothing more than a tactic to prompt more desirable behaviour from the governments in Ottawa and Mexico City while others consider the threat serious enough to prepare for—hence the partial recovery in oil prices as Trump contemplates whether to include crude oil imports in the tariff package or exclude them.
Similarly helping to send oil prices lower was a report that Crude oil stockpiles in the U.S. rose by 3.46 million barrels last week as refiner intake slumped for a third consecutive week, data from the Energy Information Administration showed.
Also playing on investors’ minds was news from China that Chinese startup DeepSeek's AI Assistant overtook U.S. rival ChatGPT to become the top-rated free application available on Apple's App Store in the U.S. That fed doubts among investors who have poured money into U.S. energy firms hoping AI would drive demand for energy to power data centres.
"The DeepSeek model is (reported to be) more energy and capital efficient, which calls into question the significant electric demand projections for the U.S.," analysts at Jefferies, an investment bank, said in a report, noting AI represents about 75% of overall U.S. demand forecasts through 2030-2035 in most projections.
"It is still early to draw conclusions on the outlook in the immediate aftermath of DeepSeek, but the 20% (-plus) year-to-date rally in power companies looks exposed," Jefferies said.
In other news from China, the world's second biggest economy behind the U.S., manufacturing data was weaker than expected, adding fresh concerns over future energy demand.
As we move into February fuel card users can expect a further price drop for next week in the region of 2.4 pence per litre.
If you or your business is seeking the most optimum way of rationalising and reducing your fleet fuel spend, Fuelmate has a wide range of solutions to fit the potentially multiple needs of your fleet.
In addition, their consultancy service identifies cost savings by analysing your current fuel spend, fleet usage and associated expenses.
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