Oil prices responded to the announcement this Monday with increases. Organization of the Petroleum Exporting Countries (OPEC) and its allies Russia to reduce the crude oil offer more than one and a half million barrels a day. Price crude oilA benchmark for Europe, up 8% at the start of the session to $86.44 a barrel, but softened and the same happened for the price of crude oil. West Texas Mid (WTI), reference for the United States. Wonderful Unknown what happens next and how it will affect prices gasoline and diesel.
1. Why does the price of oil rise?
This Monday’s rise revealed reply to the announcement production restriction between OPECcartel of countries representing one third of production From this raw material Julius Baer they claim this is due to “squaring positions in the futures market”. ” short-term speculative traders I’m waiting for the fall oil prices recently due to the increase recession risks started to increase,” they say in a note from this bank. They argue that it can happen this way too. temporary rise, later downward price trend fueled by the drums of the recent financial crisis. Its persistence over time will depend on how demand develops.
2. Why is demand key?
if any higher consumptionfamilies drive more and economic activity increases, pressure on prices will increase. In this case, all eyes are on you. Chinese and how the Asian giant awakened from the stupor dragged into the epidemic. three years later recovery in pre-coronavirus demand, increase in prices that could be shocked by this drop in production. A spokesperson for the Association of Petroleum Operators (AOP) said, “China’s reopening may attract demand strongly, but if Western economies enter a recession, both forces will come together. There is no clear visibility.”Ines Cardenal. However, at this point, we have to wait for the reaction of other countries like us. United States or Mexico able to increase their production or withdraw their reserves. stop a possible increase in prices.
3. Can the highs caused by the war come back?
After the start of the Ukrainian war, oil price According to preliminary estimates, it went up to $120 per barrel in a few days, with unexpected numbers in the coming months. This Monday, Brent price was around $85 a barrel after the rebound caused by the OPEC announcement. This price remained dominant until mid-March following the financial crisis that followed the decline of Silicon Valley Bank in the US and its derivative in Europe in recent months. $72 base per barrel. Opinions differ among analysts. The most optimistic like the bank Julius Baer they believe that the price of oil, which they placed at prices of around $70 per barrel, is heading “toward equilibrium” in the long run. experts from UBS Brent barrel will reach $100 in June and Goldman Sachs According to Reuters, it is targeting $95 a barrel at the end of the year, which is $5 more than the previous estimate.
4. How will these hikes affect gasoline?
for the price gasoline and dieselassumes raw approximately 40% of the final pricethe rest is essentially taxes. However, the National Markets and Competition Commission (CNMC), which is usually the supervisory body, ‘Rocket effect’ on climbs, ‘feather effect’ on descents: While crude oil derivatives quickly recover from any increase in the price of raw materials, the opposite effect is generally not reflected. In any case, these are not sudden changes, but the rise in oil needs to be sustained for several days in a row. EAE Business School professor, Victor Ruizdares with a guess 5% increase in fuel in the coming weeks. HE liter of diesel This Sunday cost 1,524 eurosAccording to the hydrocarbon geoportal of the Ministry of Ecological Transit, where you can check the fuel prices of all gas stations in Spain, it is 1.6% less than a year ago and 2.76% higher than before the war (February 24). in case of petrol 1.624 euros per liter1.75% less than a year ago and 1.94% more than before the conflict between Ukraine and Russia.
5. What effects can a price increase have on the economy?
The problem of a new increase in fuel prices, More pressure on inflation because of its contagious effect at a time when interest rates are rising to control prices. Inside Marchreduction oil prices it was with moderation electricity and comparison with escalation According to the preliminary data for 2014, one of the reasons for the slowdown in inflation, which was 3.3 percent, was that it was registered in the same month of the previous year. National Institute of Statistics (INE).