Oil hits $101 as the era of cheap crude comes to an end
Brent tops $101 and the focus shifts away from crude itself: the real problem is refining. Spain has 8 refineries and years of adjustment ahead.
English · Original discussion in Spanish · Published
Brent at $101 and rising: the end of cheap oil
Why should a barrel at $101 worry us now more than the other times it crossed that figure? It's the question that comes up every time Brent breaks the three-digit barrier. And the answer circulating these days is not reassuring: the rise, according to the most aggressive analyses, is no longer a sawtooth. It's a staircase.
Brent has topped $100 before: what's different now
The skeptics' argument is common sense: crude has traded above $100 in multiple cycles and has always come back down. Against that stands an uncomfortable thesis — each rebound is shorter and each peak higher, precisely because the resource is becoming scarce. Where there is consensus is at the pump. Petrol goes up when Brent goes up and, curiously, it also goes up when it goes down, on the grounds that crude bought at a high price takes months to reach the filling station.
The bottleneck isn't crude, it's refining
Here the focus shifts from the well to the factory. Crude may be abundant; what is scarce is refining capacity. Spain has eight refineries, the largest network in Europe, which guarantees nothing if the global infrastructure has deteriorated. The emerging scenario points to four or five years of adjustment, with a possible shift from tourism to industry and an economic map being redrawn: hubs such as Puertollano would gain weight while the major coastal loading ports lose it.
The conclusion, for now, is the usual one: the barrel goes up, the pump goes up and the experts go up. Something will eventually come down. In all likelihood, the purchasing power of those filling up.
Why should a barrel at $101 worry us now more than the other times it crossed that figure? It's the question that comes up every time Brent breaks the three-digit barrier. And the answer circulating these days is not reassuring: the rise, according to the most aggressive analyses, is no longer a sawtooth. It's a staircase.
Brent has topped $100 before: what's different now
The skeptics' argument is common sense: crude has traded above $100 in multiple cycles and has always come back down. Against that stands an uncomfortable thesis — each rebound is shorter and each peak higher, precisely because the resource is becoming scarce. Where there is consensus is at the pump. Petrol goes up when Brent goes up and, curiously, it also goes up when it goes down, on the grounds that crude bought at a high price takes months to reach the filling station.
The bottleneck isn't crude, it's refining
Here the focus shifts from the well to the factory. Crude may be abundant; what is scarce is refining capacity. Spain has eight refineries, the largest network in Europe, which guarantees nothing if the global infrastructure has deteriorated. The emerging scenario points to four or five years of adjustment, with a possible shift from tourism to industry and an economic map being redrawn: hubs such as Puertollano would gain weight while the major coastal loading ports lose it.
The conclusion, for now, is the usual one: the barrel goes up, the pump goes up and the experts go up. Something will eventually come down. In all likelihood, the purchasing power of those filling up.
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Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (38 replies).
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