Temas Especiales

08 de Feb de 2023

Nacional

Why are gas prices going up?

PANAMA. Panamanians are always complaining about the the volatility of gas prices, whose trajectory even energy analysts find hard to p...

PANAMA. Panamanians are always complaining about the the volatility of gas prices, whose trajectory even energy analysts find hard to predict.

A recent TIME online article explains how the traditional laws of supply and demand don’t always apply to oil prices, as seen by an upward pricing trend despite storage tankers across the globe brimming with oil no one is buying because of the global economic downturn.

Drivers have faced rising prices at the gas pump in recent months as investors and oil-producing countries hoard supplies in anticipation of a global economic recovery later this year.

The 12 member countries of the OPEC cartel voted in Vienna on Thursday to maintain output at current levels rather than increase supplies in order to bring some relief to consumers, particularly in the gas-guzzling West.

The OPEC oil ministers, whose countries account for about 40% of the world's entire crude-oil supply, also renewed their commitment to stick to their agreed quotas, rather than ship extra oil, as they began doing last April when several members ignored their agreed output limits.

OPEC leaders, many of whose economies are heavily dependent on oil exports, have struggled to stabilize prices at a level that suits their own economic needs amid falling demand and rising supplies.

Prices had rocketed to a record level of $147 a barrel last July before plummeting to $30 just five months later and beginning a new climb.

Oil analysts believe OPEC's decisions on Thursday could help push oil prices even higher; oil futures on the New York Mercantile Exchange have risen 36% in just two months, to about $63.46 a barrel on Thursday. And that appears to be on track to achieve targets set by OPEC leaders.

Saudi Oil Minister Ali al-Naimi - OPEC's key power player - said Wednesday that oil prices ought to rise to between $75 and $80 a barrel by the end of the year.

"Demand is picking up, especially in Asia," he told reporters puffing alongside him as he jogged through the streets of Vienna. "The price rise is a function of optimism that better things are coming in the future."

The economic recovery Naimi so optimistically predicts would certainly be vital to oil-producing countries, whose own economies would be imperiled by a drawn-out recession.

Oil demand in rich countries has crashed since the onset of the economic crisis last year, and is now at its lowest level since about 1981, according to the Paris-based International Energy Agency.

US oil inventories - the stored surplus - this month reached their highest level since the 1980s. And about 2.6 billion barrels are currently stored in commercial tankers around the world.

"There is some risk we will run out of storage space in the next four to six weeks," says Simon Wardell, director of global oil at IHS Global Insight, an energy-forecasting company in London.

To oil-rich countries that possibility evokes grim memories of 1998, when the Asian economic crisis sent demand plummeting, driving world oil prices down to $10 a barrel.

"If we run out of storage it could prompt a collapse in the price," says Wardell. Oil producers might then choose to dramatically cut output in order to run down the surplus.