For Goldman Sachs with the combined negative effect of crude oil and gas Eurozone GDP -2.2% at the end of the year
While in the United States Republicans and Democrats catch up an agreement in Congress for a law banning imports of gas and oil from Russiathe scenarios on the price of oil and gas come on a possible interruption of supplies from Russia following the war in Ukraine evoke it specter of recession in Europe. The price of oil benchmark European rose again, scoring new highs since 2008 at 130 dollars a barrel, with the fallout from the conflict continuing to worry investors. L’combined negative effect of crude oil and gasin a worst-case scenario, it could burying the GDP of the Eurozone by 2.2% at the end of the yearthey say from Goldman Sachs.
THE trader of oil are rushing to replace crude oil currently imported from Russia with barrels from other sources. And to do so, they are paying record premiums for supplies that can be delivered immediately. This dynamic reflects the concerns about an adequate short-term fuel supply and expectations that high prices will reduce consumption and encourage exploration.
Prices for April crude oil deliveries have skyrocketed since Russia invaded Ukraine and buyers have begun avoiding the aggressor’s oil exports. The price of crude oil benchmark Use last week has exceeded $ 110 per barrel for the first time in more than a decade and today it has briefly exceeded $ 130 / barrel. The contracts future with delivery in the months following April have increased, but not by that much. But the danger to economic activity is not only represented by skyrocketing energy prices, also from a possible stop to supplies.
Credit Suisse: “With high prices and stop supplies technical recession “
“There combination of high commodity prices and disruption of oil and gas supplies (which would probably lead to rationing / restrictions in industrial activity) would probably be sufficient a generate a technical recession“in the Eurozone, the economists of Credit Suisseremembering that “the euro area imports around 35% of its gas and around 20% of its oil supplies from Russia. If there was a disruption to oil and gas imports from Russia (either due to EU sanctions and Russia’s response to them, due to accidental damage to oil pipelines passing through Ukraine, or due to European companies who refuse to buy Russian raw materials), the blow to economic activity would be considerable. Replacing Russian gas supplies with other sources would be particularly challenging. As we noted earlier, there is limited potential to increase domestic production, increase pipeline imports from Norway, North Africa and Azerbaijan, or increase LNG imports from the US and Qatar. As such, in addition to the impact on prices, it is likely that we will see gas rationing and limitations on industrial activity due to the lack of gas “.
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