The worst financial crisis in history, economies' slower growth rates, the shrinking consumption of oil products, the easing of oil barrel prices; all these aspects are viewed as events with a positive impact for companies that operate in the industry of "black gold". So, how can this be explained?
After years when oil supplies struggled to keep up with rising demand, which also partially explains the increase in oil prices on international markets, the US crisis tempers this thirst for refined products and gives oil companies time to try and discover new reserves.
"We'll go through a period of falling demand for oil. (...) Against the global backdrop, the financial crisis and its effect of slowing down economic growth come as a breath of fresh air for the oil industry.
Practically, this context is buying us time to catch up with demand," explains Laszlo Varro, chief economist with Hungary's MOL oil group, a major European player, which ranks fourth domestically in terms of market share.
The lower demand of refined products will also have a direct impact on the value of oil prices, in terms of a reduction, which is already visible.
Compared with this summer's price levels, when oil prices got close to 150 dollars, the barrel now revolve around 100 dollars. Analysts say the real value ranges between 80-85 dollars per barrel.
"(...) Amid this crisis, we see oil prices falling to levels close to the normal values following the lessening of these speculative events. On the other hand, we've seen demand rise steadily so far, which has been explicitly reflected in oil prices. As some economies are falling into recession, oil demand is dropping, which is again reflected in oil prices," explains Varro.
According to him, despite the falling oil prices and demand for refined products, oil companies will not be significantly harmed owing to a high financial stability.
MOL representative says the opinion according to which the US crisis will not have a significant impact over the European economy was wrong. He believes the worst is not over, yet, and that it is impossible to predict the moment when the fallout of this crisis will be absorbed by the economies of the countries that felt the shock wave.
As regards development on the Romanian market, where MOL last year generated turnover worth half a billion euros, Varro says Romania remains a key market. Varro has recently announced that the group mulled the possibility of opening an oil product warehouse, in the wake of investments worth around 100m euros, through which the company would secure the entire necessary volumes to cover domestic demand, thus giving up contracts with Romanian refineries, but no decision has been made, yet.
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
