Rising oil prices – culprit behind high inflation, CA deficit The surge in inflation, which rose to a five-year high of 4.5 percent in April, has been blamed on the TRAIN Law, the weak peso, and many other factors. But one of the main culprits why inflation is surging is the sharply higher oil prices - already up by 50 percent year-on-year. Effect on inflation The sharp surge in crude oil prices the past year had a huge effect on the country’s inflation rate, especially since the Philippines is a net oil importer. High oil prices directly affect the prices of crude oil and petroleum products we import. In addition, it indirectly adds to inflation through higher transportation and manufacturing costs. Impact on the trade balance The effect of high oil prices on the domestic economy is also evident when we look at the latest trade data from the Philippine Statistics Authority (PSA). While imports are basically flat (up 0.1 … [Read more...] about Rising oil prices – culprit behind high inflation, CA deficit
Oil price news
caption An airport employee checks the fuel tank of Wizz Air’s aircraft at Budapest Airport July 10, 2014. source REUTERS/Bernadett Szabo Oil prices have risen 15% since the beginning of 2018. Last time oil spiked dramatically, airline stocks got crushed. Morgan Stanley points out three reasons why rising oil prices could actually be good for the airlines this time around. Back when oil prices skyrocketed past $140 in 2008, airline stocks got decimated as the unplanned costs ate into their bottom lines. The fuel cost burden eventually got so bad that it even forced American Airlines’ former parent company, AMR, into bankruptcy. United, which was able to stay alive, saw its stock price cut by over a third. But as oil prices fell back to healthy levels – bottoming out at just over $20 per barrel – airlines saw a period of healthy growth across the board. And with oil now … [Read more...] about Oil prices have been screaming higher — and that’s actually good news for the airlines this time around
LONDON: Oil surged on Thursday (Apr 19) close to 3.5-year peaks on simmering Mideast tensions and keen US demand, while London stocks rose with drug manufacturer Shire boosted by a possible takeover battle.World oil prices extended Wednesday's gains on the back of data showing a drop in US stockpiles - indicating improved demand - and expectations that a Russia-OPEC output cap deal will be kept in place.The market was also propelled after OPEC kingpin reportedly stated it wanted crude prices to top US$80 per barrel as it prepares for a gigantic listing of part of its state oil company. Tensions in the oil-rich Middle East also kept prices elevated."WTI and Brent Crude have hit fresh 41-month highs after Saudi Arabia stated they would be happy for oil to reach US$80 or US$100," said market analyst David Madden at CMC Markets UK.As OPEC members met on Thursday in Saudi Arabia, the cartel's largest producer was seen as favouring strengthening the partnership with … [Read more...] about Oil prices soar to highest level in years on Mideast tensions
caption Saudi Arabia’s Oil Minister al-Fa lih addresses a news conference after an OPEC meeting in Vienna source Thomson Reuters OPEC members have lifted oil prices by cutting production since January 2017. Production cuts are widely expected to extend beyond 2018, when the current deal expires. But if OPEC members end up throwing out the deal without warning, it could send prices spiraling downward. The global cartel that’s aimed at propping up oil prices could accidentally send them plummeting next year. If OPEC lifts its production caps at the end of the year, it’s likely that oil prices will gradually fall in 2019 – Thomas Pughs, an economist at Capital Economics, predicts Brent crude oil will drop to $55 a barrel from $75. But if they don’t ease the oil market into any decision to cut production, it could be painful. “There is a significant risk that OPEC does … [Read more...] about OPEC could accidentally sink oil prices
Oil prices surged more than 12 percent after producers' cartel Opec agreed to the first output cut since 2008. Oil rallied past US$50 a barrel after the Organization of the Petroleum Exporting Countries, alongside Russia, committed to an output reduction of more than 1.2 million barrels a day.Consensus had eluded recent Opec meetings that discussed a output reduction as a means to address the supply glut in the market primarily because of political differences between major members Saudi Arabia and Iran.Wednesday's landmark decision came after Riyadh and Tehran finally papered over the differences. Russia had agreed to an output reduction contingent on the Opec reaching a unified stand. With Moscow committing an output reduction of nearly 300,000 barrels a day the major producers have now lined up to put in place a brace for the falling prices. The output cut will come into force on January 1 and will remain in place for six months.Though oil markets received the news with a robust … [Read more...] about Will oil price stay higher after Opec-Russia output reduction?