The fuel crisis reflects negatively on the prices of other materials
Afrasianet - Global energy markets are experiencing a new wave of inflationary pressures, driven by a sharp rise in the price of hydrocarbons and crude oil in the United States, the European Union and parts of the world.
Despite the daily volatility and temporary pullbacks associated with the surprise US inventories data, the overall price curve is on an upward trajectory, with benchmark Brent crude holding above the $107 per barrel barrier.
Reasons for the rise. The triad of geography, refining, and supply
Three key pillars control oil markets and energy geopolitics: geography, refining, and supply. With these geopolitical and structural factors converging, energy markets are currently mired in uncertainty, led by rising geopolitical risks in the Middle East, where growing tensions are casting a heavy shadow over the security of supplies, especially with repeated attacks on energy facilities and cargo ships, and growing concerns about the safety of navigation in the Strait of Hormuz. In addition, the recent suspension of oil loading at the Saudi port of Yanbu and the reduction of some of its shipments to Europe are high.
The rise in prices at gas stations is not limited to crude oil prices, but mainly due to the decline in refining capacity, as global refineries are under pressure, as Kyiv's targeting of civilian facilities, including energy, in Russia has affected refining capacity, prompting Moscow to ban the export of diesel and gasoline, which has affected markets.
The crisis is further exacerbated by the erosion of strategic stockpiles, with the International Energy Agency (IEA) confirming that global stockpiles, which have been acting as a safety valve for price control, are decreasing sharply, leaving markets vulnerable to any new supply shock.
Price Forecast
The reports paint mixed scenarios for the future of fuel and oil prices, but overall they tend to continue price pressures. The latest reports warn of a "harsh winter" in terms of energy costs, with the US Energy Information Administration expecting the average spot price of Brent crude to rise by nearly 6% from previous estimates, with the possibility of sudden jumps above $100 remaining strongly on the horizon.
Diesel and gasoline prices remain high at European and U.S. gas stations will slow the pace of inflation, putting pressure on central banks to continue tightening monetary policies and keep interest rates high for longer periods, which will have repercussions on economic performance.
________________
