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An explanation was provided by Ben Laidler, eToro’s global market strategist: bottlenecks in refining. This is what it is about and why Italians will have to carefully look at the American weather forecasts in the coming months
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The eternal return. For the umpteenth time Italian motorists are mocked at the petrol pump. The price of oil has been falling sharply for weeks but refueling more or less always costs the same. How come? Why is there no benefit to citizens’ pockets if the prices of black gold fall?
Oil price trend over the last year
Source Investing.com
Compared to recent highs the price of oil fell by 25%. Most of the correction took place in the past month with a price drop compared to the maximum of 18%. From the data published by the Ministry of Economic Development (MISE) (https://dgsaie.mise.gov.it/prezzo_carburanti_mensili.php) it emerges instead that in the month of July the price of gasoline had a limited decline of 3.24% and diesel at 2.29%.
The first impulse is to blame the oil lobbies. In the past there has been controversy over their speed in raising prices and their “laziness” in reducing them. This time, however, the reasons are other as he explains Ben Laidler, eToro’s global market strategist.
“Brent prices – Laidler said – fell from recent highs of $ 120 due the darkening of the prospects for demandwith the increase of fears of recession andincrease in supply by OPEC and of sales of US oil reserves. This helps to alleviate inflation fears, but the bottlenecks in refining they prevent this benefit from being fully transferred to the consumer, mitigating its impact “.
The cause of the umpteenth insult to the detriment of motorists therefore has a very specific name: bottlenecks in refining.
The eToro strategist provided explanations on the nature of the phenomenon. “The so-called crack spread – he explained – has increased due to Russian gasoline export cutsto the Chinese export controls and tolarge shortage of refining capacity globally“.
So also in this case there is the hand of the war in Ukraine since they make themselves heard effects of Russian export cuts.
What are the future prospects? The scenario painted by Laidler it is only partly reassuring. “This situation – he said – should basically easing with the slow moderation of demandbut there is a potential wildcard at stakewith the forecasts of a hurricane season in the United States above average and with half the refining capacity of the United States located on the exposed Gulf coast ”.
In a world increasingly globalized American weather forecasts also become important for Italian motorists. This is the 21st century. Even if some nostalgic autarchists still don’t understand it.
