Wednesday , April 21 2021

Why does not oil go down if the price of oil falls? – 12/22/2018



In mid-2014, crude oil was US $ 100 in the United States. When it started in 2016, it traded under US $ 30. During this week, the "black gold" came back range of $ 50. If there is something that can not be attributed to the barrel, it is a predictable behavior.

The benefits of oil reverberate throughout the world, but they will play their own chapter in Argentina. In almost all countries, the decrease in the price of crude oil It involves dropping the amount of fuel. Over the past two months, Brent's hot oil, which has been taken as a reference in the country – lost almost a third of its price: it was at US $ 86, but on Thursday it was already under US $ 59.

If crude oil falls – and the amounts in the bombs everywhere – why is not this trend repeated in Argentina? The answer is in the depreciation of the weight, according to the defense of the industry. The US dollar estimated 120% against the Argentine currency in one year: it was sold to $ 17.60 in November 2017, but it happened $ 39.40 one year later

Therefore, it is unlikely that there will be an important price in the local market. Even if the barrel of oil restarted more (to an area of ​​US $ 50/55), companies could still hide behind the devaluation not to lower prices.

The government has been pressing the oil companies to reduce the amounts since December. According to the industry, that desire of the Government It could materialize half. Unless new opportunities are to the dollar, there could be a reduction in gasoline. In return, everything goes to increase in diesel.

In one year, the variation of the "super" naphtha of YPF was 75%: from $ 21.38 at $ 37.59. The increase is higher than the inflation last year, but lower than the devaluation of the same period.

The last growth, made in November, was 2.5% in the case of YPF. But the other oil companies – Axion and Raizen – started with higher percentages, twice. Then they retired and their remuneration was similar to YPF. "There was a government order for YPF to increase the loss", unleashed an industrial performance that requested not to be identified.

In the Executive Branch, they are earnestly announcing discount at the bombs. Meanwhile, companies, such as YPF, are unacceptable to do so. The consultants accompany the position of the data analysis companies and statistics.

The energy sector has invested more than US $ 14,000 million and It is one of the engines of private investment that exposes the Government. The Secretary of Energy, Javier Iguacelo, started an international tournament to raise the benefits of the country – and from Vaca Muerta – in rounds with investors. There, officials and companies are shown as part of the same team.

However, These are domestic tensions who is not now, but accumulated throughout the year. The government wants the oil companies to reduce the price of "premium" fuel by 10% before December, when there will be an increase in two taxes: one to the emission of carbon and another one to the transport of fuel. The latest adjustments for inflation. During the week, while it was discussed, the Executive Branch found a new fall at the price of the weight against the dollar. The swing did not play a good step to the ruling party in its negotiations with the petrollers.

When Iguacel was appointed to the position of Juan José Aranguren, the official also hit the issues of the conduct of oil companies, although his comments were always behind closed doors.

Throughout the year, the Government has been criticizing – in "private" comments – the behavior of the industry. While Aranguren was Minister of Energy, the President of the Central Bank – Federico Sturzenegger – blamed the oil companies, especially to YPF, due to its contribution to the inflation rate.

"This is a signage," the current Energy Secretary told several interlocutors in September, and this phrase fired the anger of the headlines of the main companies (YPF, Raizen – who explode the Shrimp – and Axion). These executives called the environment of President Mauricio Macri to see if there was a new position of the Executive's power to the sector. From the Rosada came the indication of calm the waters. Later, Iguacel promised "reference prices" so consumers could determine if they accused a proper amount. Until now, this list was not materialized.

"Since October last year, when the market has declined, we have managed to exceed the highest price of crude oil and also the depreciation of the currency that happened this year, what you know was important," explained Daniel González, CEO YPF, in presentation to investors on October 26, when the 25 years of YPF trading on the New York Stock Exchange were held.

"We hope to reach the end of the year with Our prices are aligned with international references", Said González, at that time, he showed some letters. The prices of fuel from YPF were at 5% to reach their" imported parliament ", while the price prices were a little further. In those days, the raw Brent barrel Petroleum around US $ 77 and the dollar was $ 37.70.

The "line" with international values ​​is to reach a price for local crude, which is comparable to the so-called "Import Parity". This implies that the oil companies receive an amount that would be equivalent to what they should apply if they had to import that raw material for their products – sold in the local market.

"The determination of prices is a very complex process that depends on so many variables and requires a lot of analysis," says Daniel Gerold, one of the most watched consultants in the sector. "What's true is that It can not be said that the drop in oil prices must be lowered. And it's for a simple reason: fuel has never risen due to the growth of oil prices. Drop in crude oil can not be applied when it has never moved, "he argues.

"It was difficult to spend a devaluation of more than 100% to consumers. We do not expect great changes in prices. There are at least four players (YPF, Shell, Axion and Trafigura merchant, with their Puma stations). It's a very competitive market. Again, with the prices joining the imported parcel, I think more businessmen will be trying to put their products, and that will put a little oversight on the issue of prices, "Gonzalez responded to Wall Street investors when asked – several times – the future of prices.

In the official plants, it also slid, although with more caution, than the margins obtained by local rafiners. they were superiors to those of their own in other countries, such as the United States.

This commentary causes a deep inconvenience in the industry. The main players speak of huge damage because they have not passed through the full effect of the devaluation at their prices. To Teófilo Lacroze, master of Raizen, they would hear him speak loss of several tens of millions of dollars. Lacroze was consulted by Bugler about that, but he did not answer.

Between May and July, when the devaluation exploded, Aranguren agreed with the oil companies to contract prices or moderate growth, which did not happen. In this regard, the oil companies also believe The Argentine government owes them money for what happened those months.

"They compare the Argentine refining with the US. They do not pay the large amount of taxes that come to us, they have access to other financial costs, to economies of scale, to free market. It is an unfair comparison," three retailers respond . 40% of every liter of local gasoline enters taxes, according to the rating of the oil companies. In the case of gasoleo, the tax charge board 45%.


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