What would Mean If the Price of A Barrel of Oil Rise up to $ 100
The recent rise in crude oil prices is another obstacle to the global economy, after US President Donald Trump pledged to “cleanse” Iranian oil sales.
An analysis by Oxford University found that the price of Brent crude at $ 100 a barrel by the end of 2019 would mean that the global GDP level would be 0.6 percent, lower than the current forecast by the end of 2020, with an average inflation rate of 0.7 Percentage points.
“We see an increasing risk of significantly higher oil prices,” wrote John Payne and Gabriel Stern.
He pointed out that all that would require the oil market “already narrow” is a batch of supplies that could reach the price of oil to $ 100 a barrel.
Oil prices hit their highest level in six months, last week, especially because of the tightening of US sanctions on Tehran.
Washington has announced the end of exemptions granted to some countries importing Iranian oil, including China and India, from early May.
According to Bloomberg, Brent crude has risen about 33 percent this year and is close to a six-month high, and while rising prices are often due to strong demand and a strong global economy, the shock was the lack of production.
Oil prices deteriorated at the end of 2018, while the Organization of Petroleum Exporting Countries (OPEC) and its partners, including Russia, in early January, agreed to reduce production, to restore balance to markets.
The price of light sweet crude for June delivery fell 38 cents to $ 62.92 in electronic exchanges in Asia.
Brent North Sea oil, the European Union’s June delivery, fell 35 cents to $ 71.80.
Geopolitical conditions have brought oil prices high, and Bloomberg says much will depend on the stability of these high levels of prices.
Exporters will enjoy corporate and government revenue support, while consuming countries will bear the cost of pumping, fueling inflation and hurting demand.
“In the end, there is a point where high prices may be harmful to all,” she added.
The oil price of $ 100 will have mixed effects. This increase will hurt the income and expenditure of countries and may lead to inflation accelerating.
As the world’s largest oil importer, China is at risk, as will many European countries that rely on imported energy.
Seasonal impacts will not be lost. They may also affect oil prices, especially as the summer of the northern hemisphere approaches. The already sluggish global economy will hurt demand and thus control prices.
Trump said Saudi Arabia and other Opec members agreed to increase production of black gold.
If oil production continues to grow, economists say it will need stability above $ 100, but it also depends on the strength or weakness of the dollar, as crude oil is priced on a dollar basis.
The recent rise in crude oil prices is another obstacle to the global economy, after US President Donald Trump pledged to "cleanse" Iranian oil sales. - /10
The recent rise in crude oil prices is another obstacle to the global economy, after US President Donald Trump pledged to "cleanse" Iranian oil sales.