The fact that commercial activities are not stopped maintains consumption expectations.
2021 has been a year of recovery for the global oil industry after a difficult first year (2020) of a pandemic. However, the rapid expansion of the omicron variant of the coronavirus has caused new restrictions on a global scale and caused concern, although this is decreasing over the weeks.
Prices fell last week. A barrel of Brent was at $ 69.79 and West Texas Intermediate (WTI) – the benchmark for Ecuador – at $ 66.84. But yesterday (Wednesday) its price stood at $ 79.62 and $ 76.80, respectively. His best streak in about three months.
For the former Minister of Energy Fernando Santos, although during the last weeks of November and the first of December the concern about omicron caused a drop in price projections, this diminished when he saw that most of the pictures of those infected are slight. “They have said it is no risk and they have bought again and this has risen again,” he says.
Santos adds that now there are two important edges to know what can happen to the price. One is the pressure from the big countries to OPEC + (Organization of Petroleum Producing Countries and allies) so that the price does not continue to rise and that it maintains its plan of increasing 400,000 barrels per day in its monthly production.
“The high price is causing inflation in the United States and Europe, so there is pressure on OPEC to increase production so that the price does not rise any more and I think (because of this) the WTI will stay at 75 (dollars) ″ Says Santos, who adds that it will also be necessary to see what happens next year with the negotiations of the nuclear agreement between the United States, Europe and Iran, since the latter is a large producer – between a million and a million and a half enters the market barrels a day – and it could change the scene if it could sell its oil avoiding penalties. So he sees a downward trend for 2022.
The same is the opinion of Sebastián Oleas, professor at the Institute of Economics of the San Francisco de Quito University, for whom the recent rise is a sign of the expectation that the economy will not close again and that activity will continue.
Oleas believes that seeing that there will not be a slowdown like last year, there will be an upward trend in the short term, but there could also be downward pressure due to measures by central banks to try to lower inflation, including from the Reserve United States Federal.
A contrast to what analysts said last week, when the market cautiously followed the news about the impact of the omicron variant of the coronavirus on energy demand. As well as inventory announcements from countries such as the United States, according to AFP.
“For crude, everything is about demand concerns right now … and there is a possibility that more measures will be announced in the coming days,” Fawad Razaqzada, an analyst at ThinkMarkets, told this news agency.
Although the recent growth of contagion in the United States has caused the interruption of goods and services – including flights – due to the isolation of workers, it is something that could be reversed quickly.
For now, the American Petroleum Institute, one of the most prominent research centers in the sector, has estimated a weekly fall of 3.1 million barrels of crude oil in the last week, in line with expectations.
Likewise, the meeting of OPEC and its allies (OPEC +), which have resisted calls from various countries to open the supply taps further, is next on the calendar.
OPEC + decided at the beginning of last November to maintain the gradual increase in production (400,000 more barrels per day each month until September 2022), which led the US and other large consumers to use – or threaten to do so – their strategic reserves as a way to contain prices.
In accordance with BloombergThe United States has had a coordinated release of oil from its national strategic reserves. In addition, Japan plans to sell 630,000 barrels of its inventory.
On January 4 will be the next OPEC + meeting to decide if that figure continues to be maintained or changes. (I)
Paul is a talented author and journalist with a passion for entertainment and general news. He currently works as a writer at the 247 News Agency, where he has established herself as a respected voice in the industry.
