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Oil prices fell and Epetrol stock falls

Epetrol’s share fell 7.92% this Friday on the Colombian Stock Exchange (BVC), making it trade at one of its lowest historical prices ($2,034).

The oil company led the contractions that occurred in the Colombian stock market as a result of fears of a possible international recession and also caused the drop in crude oil prices. For its part, the dollar strengthened against other currencies.

The price of Texas Intermediate Oil (WTI) closed up 5.7% to USD78.74, falling below USD80 a barrel for the first time since January.

At the end of trading on the New York Commercial Shipping Exchange (Nymex), futures contracts for November delivery were down $4.75 from the previous close.

For its part, the price of a barrel of Brent oil for November delivery in the London futures market ended at USD86.09, 4.74% less than at the end of the previous session.

North Sea crude, a benchmark in Europe, ended the day on the International Exchange Futures down USD4.28 from the last trade, when it closed at USD90.37.

The fall in international oil prices is mainly explained by fears of a possible recession due to high inflation and the central bank’s new monetary policy measures.

In particular, the increase in the rate of 75 basis points by the Federal Reserve of the United States stands out, taking it to a range of 3% and 3.25%, the highest level in the last 14 years.

In addition, the Bank of England, which raised the rate by 50 basis points to 2.25%, the highest level since December 2008.

What is expected is that there may be a reduction in consumption due to the economic recession.

The fall in crude oil prices was eased when Russia announced a mobilization campaign in its war with Ukraine and revived the apparent stalemate in talks on the nuclear deal with Iran.

Diego Franco, president of the Franco Group, explains that oil has responded to the possibility of a recession.

“When the market takes seriously the high possibilities of a recession and discounts them, what happened in the markets happens, assets go down and they adjust to lower consumption,” he explains. .

The expert declares that in this context the entire hydrocarbon sector was hit and Epetrol was not an exception. “What we saw was the response to a national environment that was a bit difficult.”
In addition to the international situation, according to the analyst, the comments from the national government continue to cause uncertainty in the industry.

“In the short term, this could be negative for Epetrol stock, but when the markets are refined and have extremes like today’s, in the future this is healthy,” says the expert.
Diego Franco points out that oil with prices between USD80 and USD85 per barrel can also help reduce inflation.

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