The concern among oil consumers led Saudi government and its allies on Friday to take an unexpected step. After a year and a half of containment to production, exporters showed ir willingness to start opening ir hand in second half of year. These comments sufficed for price of Brent to fall by 2.5%, to environment of 76 dollars. At June OPEC meeting, members of cartel must decide how far y are willing to increase offer. The hike could go from 300,000 barrels a day — most conservative option, defended by Saudi Arabia — to 700,000 or 800,000, a position closest to Russian ses.More information
- Russia and OPEC study to increase oil production
- The price of ' Brent ' barrel exceeds 80 dollars for first time since 2014
- The rise in oil will cost about 5.5 billion to Spain
OPEC and or countries like Russia now certify that, after more than a year of trying, oil market was balanced in April for first time. The producers have achieved ir goal of reducing stock to less than average of last five years in developed countries, as concluded at a meeting held last week in Saudi city of Yeda, according to Bloomberg three members of This meeting.
As producers make ir plans for next few months, a damage balance is already possible. Among companies, most punishable by rise are airlines and naval sector. In first, fuel represents a third of its operational costs, which will eventually be passed on to consumers with more expensive bills. In five months, airlines like American and Lufthansa have left more than 20% in stock market. Air France-KLM, beset by problems and resignation of its president, has lost 63%. Meanwhile, Hispano-British of IAG-Iberia have won 5%.
The new prices also hit economy of consuming countries. EU members are affected by a double-track. In addition to a 69% more than a year ago, euro has been devalued to dollar by almost 8% since February, so oil purchases — made in US currency — are more expensive. The Spanish Ministry of Economy recently put numbers to effect in country of expensive oil. Thus, to keep barrel around 70 dollars, Spain will only assume in 2018 an extra disbursement of 5.5 billion in 2018. This higher energy cost will also have pernicious effects on consumption and employment. The rise in price of oil will also have an impact on inflation in eurozone, and refore on ECB measures.
Harry Tchilinguirian, chief oil strategist at BNP Paribas, recalls however that effect of rise of crude oil on final consumer is higher in developing countries such as India, where se years have reduced subsidies to purchase of gasoline and diesel . "In United States, where taxes are very low, changes in price are transmitted very quickly to retail sales. In European countries like Spain, United Kingdom or France, taxes are a very important part of price paid by final consumer. In se cases, variations in cost of barrel are less visible, "explains Tchilinguirian in an email.
On or side of scale, big winners are countries like Saudi Arabia, which has managed to reduce its abultadísimo public deficit. Of 12.8% of GDP, expected to leave this year at 7%. And big oil and gas companies have seen ir stock market up. BP, for example, announced dividend payment for first time since 2014.To top of 100, 000 a barrel?
It's been almost four years since Brent's barrel is quoting below 100, 000. Analysts believe that current price hike can continue in coming months. However, Harry Tchilinguirian of BNP Paribas finds it difficult for crude oil to reach 100 dollars due to export power of USA. Yes, if re are no "new negative geopolitical shocks," he warns.