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Experts believe that this situation is advantageous for Turkey. As a consequence, the price of fuel and natural gas will decrease, and tensions will decrease in the Eastern Mediterranean.
1 – Why did this oil crisis occur?
Due to the coronavirus epidemic, there is a curfew in many cities around the world, people work from home, there is no traffic … Industrial production has slowed down and flights have almost stopped. However, oil wells are active in the world. To avoid damage to the oil fields, this must continue and the oil that comes out must go somewhere.
They didn’t want to take
The price of US crude oil (WTI), which had to be delivered in May on Monday, was $ 15 a barrel in the morning. However, in addition to reducing consumption and storage difficulties, contract owners avoided physical oil delivery, the price fell more than 300 percent and dropped to less than $ 40.
In other words, buyers who were unable to store offered to pay someone else to avoid physical oil. However, the price fell to negative levels as they had difficulty finding buyers.
2 – What could happen next?
In May Texas physical delivery contracts for West Texas crude oil, the price rose to around minus $ 7.5 yesterday after minus $ 40 per day before expiration.
However, now the most active expiration is the June contract and the price is around $ 16. Experts think this is a more realistic price.
What does OPEC do?
In making a statement after the rapid decline in oil, the President of the United States, Donald Trump, declared that the decline is short-term and announced that they will receive 75 million barrels of crude oil.
The Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC crude oil producing countries decided to reduce their total crude production by 10 million barrels per day for 2 months from May 1.
However, the 23 countries that are members of the group will not reduce production volumes this month, causing oversupply in the world oil market and increasing oil stocks, while insufficient capacity of stocks continues to press prices. .
From where to …
Superstar Ajda Jackson, in 1980, Turkey in the Eurovision song contest ‘Oil’ is represented with the song. The song is the chorus ‘Oh, oil, dear oil. Now I need you oil. ‘ However, with the developments that took place after 40 years, an environment was born where almost nobody wanted oil.
3 – how does it affect Turkey?
The crisis that saw the price of US oil negatively impact Turkey is expected to be limited. Turkey is mainly hitting a barrel of Brent oil due to low demand and excess supply worldwide fell below $ 20.
Is it reflected in the bomb?
According to experts, the oil crisis in the United States, to halt the activities of international companies in the eastern Mediterranean and Turkey may be the result of a series, as the cheapest natural gas recipient.
Falling oil prices will create advantages for Turkey in the importing country. The decline in natural gas prices determined by the price of oil and natural gas importing significant amount of natural gas used in the production of electricity in Turkey, the expected positive reflection of consumer and industrial costs.
Given that VAT is calculated on fixed SCT on fuel oil, the reflection of this drop in prices at the pump will continue to be limited.
What do the experts say?
‘COMPLETE ORDER FOR DIPLOMATIC ATTACK’
Association for Energy Economics Chairman of the Board Dr. Gürkan Kumbaroğlu stated that the decline in the US USA It will also be effective on Brent oil: “It is not easy for the Middle East to sell more than $ 20 as long as these prices exist in the US.”
Explaining that filling the well has become a cost because oil capacity is full in the US. In the USA, Kumbaroğlu stated that this is why the money has been overpaid.
Good for the current balance
Claiming that the crisis in the United States cannot recover in May, Kumbaroğlu said that in June, the United States will take action and curfew will be reduced.
Turkey’s current situation in terms of advantages disadvantages of accommodation Kumbaroğlu point out, which points to international companies operating in the eastern Mediterranean, “This is not going to be anyone in the Mediterranean on oil prices. There is no point in looking. Tensions will disappear in the Mediterranean. This is a good time for a diplomatic attack. ”
Kumbaroğlu, Turkey’s outsourced oil payments would be a positive evolution in the balance, natural gas prices will be cheaper, while the tax treatment would be limited as long as the effect of price pump prices continued to decline, said.
Natural gas bill falls in second half
ATA Platform Director Assoc. Dr. Volkan Özdemir said June futures prices will be more important in US WTI oil.
Explaining that financial prices have been effective in determining oil prices for a long time, Özdemir drew attention to the fact that real and financial markets diverged when demand collapsed. Turkey remembers more oil Brent Özdemir followed, “Turkey will continue to decline, it seems that the price of oil,” he said.
Noting the effect of oil prices on natural gas calculations, Özdemir said: “Starting in the second half of the year, the natural gas bill falls. The $ 40 billion natural gas bill falls very seriously in 2020. ”
