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Increasing demand worldwide Oil price close to $ 100?

Status: 23.06.2021 3:10 p.m.

Oil is more expensive than it has been in two years. Experts warn of a supply crisis: The prices for crude oil and thus also gasoline, kerosene and heating oil could soon rise much higher.

From Angela Göpfert, tagesschau.de

Oil prices hit new multi-year highs this week. For the first time in two years, a barrel (159 liters) of the North Sea Brent cost more than $ 75 again. For a barrel of the US West Texas Intermediate (WTI) variety, more than 73 dollars were paid on the market – the highest amount since October 2018. Rising oil prices – something that businesses and consumers may need to get used to. According to some experts, the new multi-year highs in oil prices, which many consumers are already feeling painfully at gas stations or when buying heating oil, are just the beginning of a longer upward trend in the oil market.

Analysts predict rising oil prices

The experts at the US investment bank Goldman Sachs expect the Brent price to rise to $ 80 this summer. But that is not the end of the story. An oil price of $ 100 is a “real possibility”. Alex Sanna, top oil trader at Glencore, the world’s largest commodity trading group, also said, according to the Financial Times, that an oil price of $ 100 is becoming increasingly likely.

The experts at JPMorgan even see a new oil super cycle looming and recently renewed their forecast of an oil price of $ 190 in 2025.

Demand congestion as a price driver

Francisco Blanch, raw materials expert at Bank of America, may not look quite that far into the future. For this he has the most precise 100-dollar forecast ready: the oil price could crack the round mark as early as 2022. The market hardly changes on the supply side – and this in turn is offset by an immense backlog of demand. It is easy to explain where this backlog of demand comes from: Just as many private households restricted their consumption during the pandemic, so too many companies put the necessary investments aside. Now that the global vaccination campaign is gaining momentum, at least in the major industrialized countries, consumers, companies and economies have a lot to catch up on.

Delta variant is a risk factor

The more relaxed Corona situation and the awakening global economy are leading to higher demand for crude oil, gasoline, diesel – and kerosene. Oil expert Blanch sees the rising travel industry as a major price driver.

The delta variant of the virus from India, which could lead to a further tightening of the corona measures, is currently also posing a risk to the economy.

Signal of a shortage of supply

In search of signs of whether demand is actually exceeding supply at the moment, it is worth taking a look at the market for so-called oil futures. Current oil futures contracts are quoted there higher than contracts with delivery at a later point in time. Such a constellation, referred to by experts as “backwardation”, is rather unusual and a clear indication of fear of scarcity – “and thus for further rising prices”, as market expert Robert Rethfeld from Wellenreiter-Invest emphasizes.

A price corrective called fracking

The rising prices should actually make re-entry into the oil market attractive for the US shale industry. In the past, the US frackers acted as flexible price correctors on the oil market: If prices rose, more shale oil was drilled in the short term, supply increased, prices fell again.

As a reminder, the last time oil traded above $ 100 was in 2014, when a rapidly growing supply from the US fracking industry brought an abrupt end to the last oil super cycle.

Sustainability trend slows US oil industry

But this mechanism doesn’t seem to work that well anymore. This is due on the one hand to the new US President Joe Biden, who imposed a stop on oil and gas drilling on state-owned land in January, and on the other hand to the global trend towards sustainable investment.

“The number of active US oil wells is increasing only slowly,” emphasizes wave rider expert Rethfeld. “The investors do not want to see an expansion of the production capacities at the moment, but instead demand investments in renewable energies.”

Iran as a risk factor

The production countries of the OPEC + oil cartel, especially Saudi Arabia and Russia, could benefit from the West’s climate policy. It remains to be seen how willing they are to expand production to fill the void left by the US oil industry.

Especially since there are supply risks on the part of OPEC: “After the election of an ultra-conservative cleric as the new president, Iran will have a hard time overturning US sanctions and increasing oil exports,” said Eugen Weinberg, raw materials expert at Commerzbank .

Inflation Risks Before Revaluation?

Should the oil price actually rise further towards 100 dollars, this would inevitably lead to a reassessment of the inflation risks in the financial markets, since the oil price is one of the main drivers of consumer prices.

Just yesterday, Jerome Powell, head of the US Federal Reserve (Fed), told the House of Representatives budget committee again that the Fed was considering the current high inflation rates a temporary phenomenon considered. However, market expert Rethfeld emphasizes: “Any oil price above $ 100 would suggest to the public that Powell is wrong.”

Clarification from Brinkhaus Petrol is also becoming more expensive with the Union

Status: 11.06.2021 10:40 a.m.

When it comes to the issue of gasoline prices, the focus is on the Greens. The grand coalition decided to increase the price of CO2 a long time ago. Union faction leader Brinkhaus made this clear again, but demanded an appropriate transition period. In the dispute over rising gasoline prices, Union parliamentary group leader Ralph Brinkhaus has made it clear that gasoline would also become more expensive with the Union at the head of the future federal government. “Petrol is getting more expensive, now a little bit, in the second half of this decade it will be really more expensive,” said the CDU politician in Im ARD morning magazine . This was already decided in autumn 2019. “The fight against climate change will not be for free.”

Not the “if”, but the “when” is up for debate

It is important to create realistic and fair transition periods. Germans do not have to sell their cars immediately, but they do have to be prepared to switch to electric cars or low-consumption cars in the future. The social question is not that gasoline will become more expensive. “But the social question is: Do people have a transition period that is long enough to adapt,” said Brinkhaus. This applies not only to gasoline, but also to heating. The plan is to absorb the rising prices through subsidy programs.

Gasoline price hike long been a done deal

In the debate about higher fuel prices, government spokesman Steffen Seibert had recently made it clear that the prices for fuels such as gasoline and diesel would rise in the coming years anyway. The federal government has decided to scale the CO2 price up to 2025, which already has “effects on all fuel prices”, said Seibert last Friday. This applies equally to gasoline, diesel and heating oil. The background to the statements: The coalition of the Union and the SPD had introduced CO2 pricing in traffic and buildings as a central measure in the fight against climate change. Since the beginning of the year, the CO2 price has been 25 euros per ton. According to previous plans, it should rise to 55 euros by 2025. According to calculations, this would mean a surcharge of at least 15.5 cents for a liter of petrol and at least 17.4 cents for a liter of diesel.

Baerbock’s advance fueled debate

In line with the new climate goals of the federal government, the Greens are calling for the increase to be brought forward and for the CO2 price to be raised to 60 euros per ton as early as 2023. At the same time, they propose to give back 75 euros each from the state revenue from the CO2 price to the citizens in order to avoid social upheaval. Most recently, the Green Chancellor candidate Annalena Baerbock fueled the debate. According to her party’s draft program, she advocated a gasoline price increase of 16 cents and, after her announcement, received a lot of criticism, especially from the ranks of the SPD. CSU General Secretary Markus Blume also accused the Greens of proceeding ideologically in the climate debate. “For Annalena Baerbock, climate protection is above all a fight against drivers,” Blume told the media. Mobility shouldn’t be a luxury. Rural areas and commuters will not be allowed to bear the burden unilaterally.

A clear majority rejects gasoline price increases

Environmental groups have long accused the parties of “dishonest election campaigns at the expense of the climate and biodiversity” and argued that the German government itself initiated the price of CO2, which is already making fuel more expensive and will continue to make it more expensive. The opinion of the Germans is pretty clear: According to the latest GermanyTrend three quarters (75 percent) of Germans reject a gasoline price increase. 22 percent think such a measure is a step in the right direction. A switch from internal combustion engines to electric drives in cars is also rejected by 57 percent. 37 percent would support such a measure.

By Jörg Sauerwein, WDR If you refuel in the right place at the right time, you can save a lot of money. At the same petrol station, prices fluctuate by an average of twelve cents per liter over the course of the day. The differences to the competition are even greater: in a city, the differences can be up to 22 cents, according to the Federal Cartel Office.

Several price peaks a day

In the morning the fuel prices are usually at their highest. After that it gets more and more confusing. The prices drop to the lowest point in the evening. But they keep increasing for a short time every now and then. So far, five such peaks have been common in prices, report the Bonn market watchdog. In the past few weeks, however, some providers even had six of these peaks in prices.

High surcharge at motorway filling stations

The price difference to the motorway petrol stations has also increased. According to the annual report, customers there now have to expect around 25 cents per liter more than at a street gas station. The President of the Cartel Office, Andreas Mundt, recommends checking your smartphone before refueling. Many mobile phone apps make it easy to find cheap gas stations.