Photo: Bestfinancetime.com
By Isaac Cohen*
Almost nobody anticipated that the stress among some regional banks in the United States and a global bank would push down oil prices. It should be recalled, last year the war in Ukraine pushed oil prices to more than $120 dollars per barrel, with gasoline prices in the United States reaching around $5 per gallon. As global markets adjusted to the new trade flows caused by the war, this year oil prices came down to around $75 per barrel, amid concerns the rebound of the Chinese economy, the world’s main world importer could again push oil prices upwards.
However, last month the stress among regional banks in the United States and the demise of a global Swiss bank, interpreted as signals of imminent recession, pushed down oil prices to a 15-months low, below $70 per barrel, while energy stocks on Marc 15 tumbled almost 6 percent, the worst performing sector of the S&P 500 stock index.
But without waiting for the expected rebound in the Chinese economy, last Sunday the Organization of Petroleum Exporting Countries and Russia announced production cuts of more than one million barrels per day, pushing crude prices on Monday to more than $80 per barrel. Therefore, the specter of increased inflationary pressures caused by high energy prices has returned, with some analysts predicting $140 per barrel by the end of the year.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.
