São Paulo – The recent higher oil prices over the last few days should not bring great reflexes to the Brazilian economy. According to specialists, Brazilian self sufficiency in oil allows the country to protect itself from global movements. "We have capacity, although we are on the limit, to supply demand," said Eugênio Stefanelo, a professor of Economics at the Federal University of Paraná (UFPR), at the Business Administration and Economics College (FAE-Centro Universitário) and technician at the National Food Supply Company (Conab).
Despite self-sufficiency, Brazil imports oil. But the country also exports. And Petrobras president José Sérgio Gabrielli guaranteed, this week, that the company does not plan to increase the price of oil products. "If the price of the barrel of oil reached US$ 25, US$ 30 and Petrobras did not lower the price of petrol, then there is no reason to increase it now," said Carlos Stempniewski, Economics and Politics professor at Rio Branco Integrated Colleges. Another fact weighing heavily is that the government of Brazil is fighting against inflation and Petrobras is a state-owned company.
Stempniewski believes, in fact, that this expansion in oil prices is following the same route as that of agricultural commodities in recent months, and is not motivated by the protests in Libya and Egypt. "Up to now, there are no signs that these countries have stopped production of crude oil or are about to stop exporting. They depend on exports. We had no problem in Suez Canal," said Stempniewski, referring to the Egyptian canal through which oil in the region is exported. Libya, for the time being, has only reduced its daily production by 8%.
The professor believes that this recent expansion in the price of oil is, as happened with the price of agricultural commodities, a result of speculation. "Oil does not rise from US$ 70 to US$ 105 per barrel without a fact that causes supply interruption. There is no sign of lack of supply," he pointed out. Stempniewski recalls that there is currently much speculative capital worldwide, and it has nowhere to go, as investment in subprime or stock markets has become little attractive. "These things have disappeared and the capital is out in the open, migrating to the area of commodities." Oil, according to him, was the last product on the list.
Different from the professor at Rio Branco Colleges, Stefaneli believes that higher oil prices are a reflex of the crisis in the Arab world. But he believes that as this is the reason, as it is a result of the political crisis in the region and not of offer and demand, it should not extend to other commodities, like agricultural ones. In the futures oil market in the United States, the North American product ended the day with 8% appreciation on Tuesday (22). WTI Oil for delivery in March closed at US$ 93.57 per barrel.
*Translated by Mark Ament
