The diesel price could drop below one euro - News-Credit-Mortgage-Coin


Car donation, Insurance, Credit, Money, news

Coin Market

Tuesday, March 10, 2020

The diesel price could drop below one euro

The oil price plummeted within a few hours as it had recently in the Gulf War. The dispute between Russia and Opec could delight many drivers - but plunge many states into chaos.

The crash comes immediately and it is violent: it only takes a few seconds when the commodity exchanges in Asia open late Sunday evening (CET). And the oil price has already collapsed: it will collapse by more than 30 percent. The North Sea reference variety Brent suddenly costs a good 31 instead of 45 US dollars per barrel (around 159 liters).

Trading even has to be suspended for a short time, the price drop is so severe. The oil market has not seen such a slump since the Gulf War in 1991. Even at the height of the global financial crisis in 2008, the prices of the raw material fell as suddenly as last night. A barrel of Brent costs just under $ 33.95 on Monday morning, around 25 percent less than last Friday.

The trigger for the collapse is a power struggle between the organization of oil exporting countries (Opec) and Russia. In recent years, Opec, led by Saudi Arabia, and the Russians had partially coordinated and limited their production to keep prices up. But last Friday, this de facto cartel called Opec + broke. Global oil demand is falling due to the consequences of the coronavirus epidemic. Saudi Arabia and Russia, as the second and third largest producers on earth, did not agree on who should restrict funding and to what extent.

Vereinigte Arabische Emirate
VR China
Welt gesamt
Davon OPEC und Russland

Russia refused to cut production significantly on Friday. As a result, Saudi Arabia's national oil giant Saudi-Aramco announced at the weekend that it would trade its oil with new discounts of six to eight dollars a barrel. In addition, the Saudi Arabians have told market participants to expand their production, the Reuters news agency reported.

The prospect of an oil spill as consumption declines implodes prices. "Opec is starting a price war," says Eugen Weinberg, chief commodity strategist at Commerzbank, the SPIEGEL. It is difficult to estimate "what exactly that means for the global economy".

But one thing is becoming clear: This crash may threaten the global economy. Oil is not just the most traded commodity on earth. Its price is decisive for the economic well-being of producer and consumer states. A sudden drop in prices like that night threatens the stability of numerous nations and regions.

It can also be a sign of an impending global recession. At least that's how investors around the world seem to understand him: on stock exchanges worldwide, prices fell significantly on Monday morning, and the currencies of oil-producing countries such as Russia and Norway also depreciated.

In the past few weeks, the price of oil had come under pressure due to the corona virus. China, the world's largest oil consumer, uses less fuel than planned, and a number of airlines, such as Lufthansa, have massively cut their flight plans. The International Energy Agency (IEA) is already predicting a worldwide decline in oil consumption due to the corona virus - for the first time since 2009.

The oil-producing countries are now fighting all the more violently for market shares - above all Opec. The cartel has been on the defensive for years, and its share of global sales continues to decline. This is mainly due to the massive increase in funding in the United States. Fracking technology has made the United States the largest oil producer in the world.

No comments:

Post a Comment