2024-10-06 04:53:48
The Center for Economic Development Initiatives presents an analysis of the developments in the global oil price market and its impact on the RA economy.
“On April 20, 2020, the price of WTI oil futures fell by 315.87 percent to minus 39.44 USD per barrel, as indicated by the data of the London ICE exchange. this indicator is considered unprecedented.
In turn, a negative quote means that the futures seller makes an additional payment to the buyer, as a result of which the ultimate owner of this instrument receives money, and will receive additional oil in May.
On April 20, WTI oil futures for June delivery on the London ICE exchange also fell by 19% to $21.1 per barrel. However, according to the “Financial Times” newspaper, contracts for later deliveries of American oil are being maintained in the hope that the gradual lifting of quarantine measures in many countries will lead to an increase in demand for crude oil. The restrictions implemented to prevent the spread of the coronavirus in many of the world’s largest economies have led to the fact that the demand for oil has fallen by almost a third.
On April 21, the price of American WTI oil futures (for delivery in May) returned to a positive value. It rose to $1.40 on the NYMEX. The June futures of WTI rose to $21.33, and the June futures of the Brent Black Sea mixture on London’s ICE exchange are trading at $25.39 per barrel (May contracts are sold out).
Global oil prices will depend on the agreement reached within the framework of the “OPEC+” consensus, and on how quickly the economies of the largest countries in the world will return to normal and will lead to an increase in demand.
As for the prices of gasoline sold in the RA market and the consumption demand, the latter can be somewhat reduced, but not so drastically due to several circumstances:
During 2019, as in 2018, 3 main players continued to be considered in the gasoline market: “Sipies Oil Corporation” LLC (“Sipies Oil” LLC), “Flash” LLC, “Max Petrol” CJSC. which accounted for 92% of the market and more, which indicates an oligopoly market.
According to the TMPP analysis, price fluctuations had a minor impact on the volumes of gasoline consumed in 2019-2018, which indicates that the latter is inelastic.
Armenia imports gasoline from Russia mainly from one supplier, “Rosneft-Armenia” CJSC, therefore the price of gasoline supplied to Armenia will be formed as a result of negotiations with the latter.
The level of household final consumption expenditure will determine demand,” the center’s analysis says.
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