When we least expected it, we are experiencing one of the lowest moments in the price of oil in more than a year. At around 75 dollars per barrel, the price of oil has fallen significantly since the end of 2022 and is far from prices that broke, by far, the barrier of 100 dollars/barrel. Are we facing a new rise?
150 dollars. January 2022, the Brent barrel price was buying around 85 dollars/barrel. Soon after, the price skyrocketed, breaking the $100/barrel barrier. It was its maximum since 2014 and, worst of all, the analysts did not see the ceiling. That same month of February, the idea spread among the experts that $150/barrel could be reached.
Luckily, the worst forecasts did not come true but they did not stay too far away. If we look back, we see that in March 2022, oil reached a maximum of 129.49 euros. With the rise in gas, we were facing the worst energy crisis since 1973. Of course, the Ukrainian War was already omnipresent in all price increases.
$73.06. It is what marks the price of a barrel of Brent as I write these lines. A drop in the price that has been more or less constant since last June 2022, when the price was still above $120/barrel. Before, in April, the Government began to subsidize fuel for all drivers, as other European executives were already doing.
Until a couple of weeks ago, the price of a barrel, despite everything, had not fallen below 80 dollars/unit, in a stagnation that had lasted since December. However, the trend has broken, the price has fallen and, despite everything, some voices are already beginning to warn that we are only facing a pivotal moment.
Why has it fallen? . According to analysts consulted by Expansión, the fall experienced by oil between March 9 and 20 is closely linked to the fall in bank prices, raising a gloomy scenario in a context in which investors were already discouraged.
Before the latest drop in price, they point out that the increase in interest rates and forecasts of a slowdown in the world economy have caused the demand for oil to be quarantined, which has caused the price of a barrel of Brent to fall . John Kilduff, a partner at Again Capital LLC, explained the same thing to Reuters.
We may be facing a new upturn. What they also defend from the economic newspaper is that we are in a scenario that encourages a sharp rebound. Its experts assure that the turmoil experienced in the stock markets in recent weeks is merely temporary and that investors will regain confidence in the markets.
To these purely conjectural opinions, they add the idea of the impact that China will have on the acceleration of the world economy. Its continuous closures have caused its impact in 2021 and 2022 to be limited, but they hope that 2023 will be the year in which the Asian giant regains strength and encourages, once again, the demand for oil.
controlling. In addition to all of the above, OPEC+ is keeping its pulse to prevent the price of oil from falling. In October 2022 they confirmed that they would reduce their world production, with the aim of keeping the price of a barrel very close to 100 dollars/unit. Finally, the price has fallen further, but the restrictions are in place until the end of the year.
It also remains to be seen how the reduction that Russia is making in its oil production affects in the long term. In February it was announced that, without counting OPEC+, the number of barrels signed by them would fall, which caused a timid rebound at first that, however, has not ended up raising its price. Until now, India and China were the main buyers of this product.
ING analysts, however, have focused on the United States. They assure that if the price remained close to 70 dollars, the country would take the opportunity to recharge its reserves. And, at the same time, from Axios they point out that the elevator can go up again if the price of oil remains low, since interest rates can be lowered and, again, revive the economy, consumption and raise the price of crude.
In Xataka | OPEC believes that oil will continue to be relevant in the future. And he has hopes set in Mexico
Photo | Jesse Donoghoe
