Cycle of declines led Petrobras’ fuel prices to surpass those of the international market
The price of oil fell again this Wednesday (8.Nov.2023). The Brent barrel, a reference in the international market, fell 2.5% and closed the day at US$79.54. It is the lowest value of commodity since July 20th of this year. In November alone, the price accumulated a drop of 6.7%.
The barrel rose rapidly after the start of the conflict between Israel and Hamas in the Middle East, amid fears of an impact on global supply, as the region is home to some of the largest producers in the world. The price reached US$92.4 on October 19. Since that day, it has been falling.
There are 2 movements in the market that have led to a sustained decline. On the one hand, fears about possible reductions in supply due to the conflict in the Middle East have diminished and production in the United States and OPEC (Organization of Petroleum Exporting Countries) countries has grown.
On the other hand, there is growing concern about the performance of the global economy, which is directly related to the demand for oil. There are signs of a decrease in demand in the US and China.
The successive drops in the price of a barrel caused an unprecedented scenario since Petrobras inaugurated its new fuel price policy in May this year. The gap has been eliminated and the prices charged by the state-owned company internally are above the PPI (Import Parity Price), a reference in the international market.
This Wednesday (8.nov), according to an analysis by Cbie (Brazilian Center for Infrastructure and Energy), the price of gasoline in the country is above international references by 3.47%, as is the price of diesel (+6.55%) and cooking gas (24.85%). Here is the full analysis (PDF – 120 kB).
Although Petrobras has abandoned the PPI as a pricing policy, international quotes still have an influence on prices. Especially because around 25% of the diesel consumed in Brazil is imported, as is 15% of gasoline. If the barrel continues to fall, this opens the way for the state-owned company to promote a new cut in fuel.