German fuel prices hit multi-month low on subdued demand

The wholesale price for diesel loaded by truck in Germany has returned to pre-war levels, partly due to a temporary reduction in energy tax that lowers prices by €14.04 per 100 liters until the end of June. However, prices for German greenhouse gas (GHG) reduction obligations have risen, partially offsetting the decline in domestic wholesale fuel prices.

Traders observed lower average daily spot volumes for heating oil and diesel compared to the previous week. This is attributed to consumers expecting further price decreases amid easing geopolitical tensions, leading them to postpone purchases. Market participants anticipate an increase in fuel demand for the current week, with potential pull-forward effects before the tax reduction expires on July 1.

In some areas, particularly in the north, agricultural customers have begun purchasing diesel in bulk. Import demand along the Rhine river is also increasing as traders restock their tanks in anticipation of higher demand. However, falling water levels on the Rhine are contributing to considerably higher freight rates.

Availability of heating oil in the southern regions remains limited. Recurring loading disruptions have been reported at the Bayernoil consortium's Neustadt-Vohburg refinery, with some sellers temporarily not offering any product.