Local crude oil prices are decoupled from the global market

In the last weeks,
international energy prices soared
as a event of the war in Ukraine and the sanctions imposed on Russia, ane of the main global producers of oil and gas. The barrel of Brent oil —which is used as a reference for Argentina— touched USD 130 this week and this Wed its toll closed close to USD 111.

Do these values ​​imply a time to come increase in gasoline and diesel prices at service station pumps in the Argentine market?
The barrel of oil in Argentine republic is traded at half, between USD 57 and USD 60 per barrel. Local refineries are more often than not supplied with crude produced in the Argentine market place, but there is also a office that must be imported.

In the case of YPF, which processes its own crude, last year it had to resort to 20% of crude from third parties, in the midst of circuitous negotiations with other local producers as a effect of toll differences in the domestic and international markets, as highlighted by company directors in the recent presentation of the visitor’south results. “As a consequence, during the quarter,
we increased imports of premium diesel and, to a bottom extent, premium gasoline to meet local demand within our retail network”, they explained. The expectation is that this percentage will exist reduced.

In the presentation of the results, the directors warned that the retail prices of the pumps affect about 50% of the total full income of the company.
After several months of freezing, prices rose nine% in February
for regular fuels and an additional 2% for premium fuels.

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Increases in global prices put pressure on fuels to rise

Increases in global prices put pressure on fuels to rise

From the sector they clinch international prices press for a rise. and guess
the bidding will continue stiff in the coming months if the recent extension of the decree of the Executive Power that postponed until June the updating of fuel taxes is taken into business relationshipa sign that the Government is willing to give up income (information technology is estimated about USD 400 million in a quarter) in exchange for prices not moving at the pump.

“Uncertainties related to the future evolution of the global economy together with geopolitical tensions or the impact on international oil prices volition probably add to the local volatility. In such a context, we will maintain our focused effort to generate profitable production growth. We aim to at least partially reduce the departure betwixt local and international prices. Even so,
We are aware of the reality of the Argentine economic system that probably makes it hard for our sector to follow international prices”, he indicated
Sergio AffrontiCEO of the company.

“The price adjustment made in early February offset the boosted appreciations in international prices upwards to that time. However, the most contempo rebound from the international crisis that took Brent above USD 110 created a farther distortion. Nosotros expect to remain active to continue our dollar margins at to the lowest degree stable. This year, while at the same time evaluating the convenience of reducing the gap with the international price”, he pointed out.

In the sector they assure that
decoupling with international prices discourages investments. Today, total oil production is 577,000 barrels per day (kbd), of which 38% comes from unconventional deposits. The country reached in 2021 the highest levels of production since 2012.

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Most of the market is supplied by local crude production

Most of the market is supplied by local crude production

Another impact is the import of diesel and fuel oil. “Probably local production is non plenty to comprehend the need for diesel and fuel oil. Diesel oil is cardinal for the countryside, because it is used for agricultural machinery. And besides for the generation of electrical energy. In general, 15% of the local demand is imported,” he explained.
Gerardo RabinovichVice President of the Argentine Institute of Energy (IAE) General Mosconi.

“Information technology is a pressure cooker to continue maintaining these prices and then decoupled from international prices because it harms the entire industry. Nobody is going to produce in Argentina.
In the land, 80% of the fuel we swallow is Argentine; and 20% is imported. That is the problem, no visitor wants to import information technology,” he said.
Gabriel Bornoroni, Head of the Confederation of Hydrocarbon Trade Entities of the Argentine Commonwealth (Cecha).


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Source: https://news.today24.news/news/100334.html