Page 13 - LatAmOil Week 34 2022

LatAmOil ARGENTINA LatAmOil

Argentinian motor fuel prices have risen by more than 41% on average over the last 12 months (Photo: YPF)

In doing so, it is going against the advice of inter- prices had risen by a total of 41.7% on average
national financial institutions (IFIs) such as the over the last 12 months, with diesel prices up by
International Monetary Fund (IMF). 51% and gasoline prices up by 32%. The rise is
The persistence of the subsidies has made a matter of wide concern for YPF accounts for
Argentinian filling stations a popular desti- about 55% of all retail fuel sales across the coun-
nation for drivers who live in nearby regions try. The NOC said on August 21 that it would
of Paraguay and Uruguay, Mercopress added. continue to “monitor the evolution of the var-
Cross-border trade has helped drive motor fuel iables that affect price formation, always taking
consumption levels up by 30% in north-eastern into consideration the particularities of the
Argentina since 2019, it noted. macroeconomic context of the country and the
It went on to say that Argentinian motor fuel international reality.” ™

GLOBAL
Prince Abdulaziz: OPEC ready to make

production cuts to correct oil price drop

SAUDI Arabia’s Energy Minister and OPEC markets can’t reflect the realities of the physi-
kingpin Prince Abdulaziz bin Salman Al Saud cal fundamentals in a meaningful way and can
said this week that the OPEC+ group is prepared give a false sense of security at times when spare
to reduce oil output as a means to correct the capacity is severely limited and the risk of severe
recent fall in prices. Speaking to Bloomberg, he disruptions remains high.”
said the group had shown that it was prepared Noting that the paper and physical markets
to act to counteract market volatility and was are becoming increasingly disconnected, he
committed to do so again if required. added that the market is “in a state of schizo-
Noting that oil futures have dropped owing phrenia,” with “erroneous signals” being sent
to perception rather than physical shortages, “at times when greater visibility and clarity and
Prince Abdulaziz said: “The paper oil market well-functioning markets are needed more than
has fallen into a self-perpetuating vicious cir- ever to allow market participants to efficiently
cle of very thin liquidity and extreme volatility hedge and manage the huge risks and uncertain-
undermining the market’s essential function of ties they face.”
efficient price discovery, [which makes] the cost Having announced a quota increase of just
of hedging and managing risks for physical users 100,000 barrels per day (bpd) following its latest
prohibitive.” meeting, OPEC and its deal with non-member
Concerns about Chinese demand and reces- producing nations have come under increasing
sion in the West have seen crude prices fall by scrutiny. Prince Abdulaziz said that the group
around $25 per barrel in recent weeks, down by would begin working on a new deal “beyond
more than a third since the early-year highs of 2022 which will build on our previous experi-
the mid $140s. The minister said: “This is det- ences, achievements and successes,” seeking to
rimental because without sufficient liquidity, prevent market volatility. ™

Week 34 24•August•2022 www. NEWSBASE .com P13