Oil rise is a challenge for the country’s economy

Again, international crude oil prices beat their own records and reach higher values ​​than those already recorded since last November 2021.

In mid afternoon the price of a barrel of crude WTI (West Texas Intermediate) was quoted at US $ 82.31 in the New York market, while Brent crude in the London market was worth US $ 84.42.

The WTI oil (for delivery in February 2022) has operated at US $ 82.31 a barrel, rising about +1.09 USD (+ 1.34%) compared to US $ 81.22 at the close of Tuesday in New York, according to to international reports specialized in crude oil.

While Brent oil (for delivery in March 2022) has traded at US $ 84.42 a barrel, rising about +0.70 US $ (+ 0.84%) compared to US $ 8,372 at the close on Tuesday in London.

At the closure, Bloomberg reported a peak in WTI crude of $ 82.56 for future prices for the coming February, rising to US $ 1.34 compared to the previous day; while Brent was quoted in February at US $ 84.56, for an increase of US $ 0.84 compared to the day before.

Agencies

While the French Press Agency (AFP) attributed Tuesday’s rise to a weakness in the US dollar, the Reuters agency said yesterday that “Oil prices hit two-month highs due to tight supplies and fewer concerns about the potential impact of the omicron variant of the coronavirus on demand ”.

Another cause, according to Reuters, is due to the announcement by Federal Reserve Chairman Jerome Powell, who said that the economy of the United States, the world’s largest consumer of oil, should withstand the current increase in Covid-19 cases with impacts. “Short-lived” and ready for the start of the monetary policy tightening cycle.

Government will not continue to subsidize fuels

According to an interview with Hoy Same reviewed by this medium, President Luis Abinader affirmed yesterday that if the price of oil continues to rise, it will be impossible to maintain the fuel subsidy in the country.

“It is impossible to continue. We subsidized the price of oil, of all hydrocarbons, last year for about 13,000 million (pesos) … That is impossible to continue with that. It’s impossible, “said the president during an interview on the morning program Hoy Same, which is broadcast on Color Vision (channel 9).

The president explained that the Government is not prepared for the barrel to rise much.

“We are prepared for it to go up a bit…”, he admitted.

He said that yesterday a barrel of Brent oil was quoted at US $ 83 and West Texas at US $ 81.

Abinader added that the cost of natural gas and coal has also risen, which has also impacted electricity generation.

The president said that if oil continues to rise, there will come a time when he will have to talk with the country to see what can be done, especially to prevent higher inflation from occurring because the inflationary effect of oil is transversal throughout the economy.

He stated that this is why fuel prices are his greatest concern.

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