Ricardo Bordalo
September 19, 2022 at 12:23
But the global economic crisis fueled by the war in Ukraine, with inflation soaring in major Western economies, with the loud announcement of a recession in the US and the risk of closing much of the European industry dependent on Russian gas, due to Moscow sanctions – cutting off supplies – to European sanctions, is also not letting the barrel float smoothly.
Faced with this stormy scenario, the markets once again looked like a roller coaster, in an up and down unsuitable for traders with a weak stomach, and today, around 12:00, Luanda time, it is worth below 90 USD, again , in the contracts for October, reaching 99.9 in London Brent, which serves as a reference for Angolan exports, and 83.6 in New York’s WTI, a red flag drop and on the verge of 2% of one and other side of the Atlantic.
This is bad news for the new Angolan Government, especially for the reinstated Finance Minister, Vera Daves, who will have to deal with a falling barrel, although still at a reassuring bar, but substantially less than what was needed to deal with renewed commitment to combating the national economic crisis, responding to the equally renewed challenges of the Fifth Legislature announced by the reinstated President João Lourenço: fighting hunger, poverty and unemployment.
This is because oil still accounts for 95% of national exports, 35% of GDP and close to 60% of tax revenues.
In this global context, the second biggest enemy of rising crude, right after excess supply, is the reduction in demand driven by the crisis, from which the rise in interest rates, for example, used by central banks to combat inflation, is also showing itself aggressively, with the main economic agencies underlining this, an already visible drop in demand forcing the loss in the markets that “design” the ups and downs of the global “black gold” business.
With its eyes always on the Russian gas crisis in Europe, crude oil will inevitably depend, in its loss or gain in value, on the European capacity to face the energy crisis this winter.
In other words, if the Russians really turn off the gas tap as a sanction to European sanctions because of the war in Ukraine, and if the German or Italian reserves are not made up – and that is the case – then prices could skyrocket in the future. .
But until then, until it becomes clear that this expected crisis looms large overshadowing the future of Western Europe, the barrel of crude is still likely to sink… American.
