International shifts in oil prices have a direct impact on the national economy because they establish the criteria for Costa Rican prices.
According to data from the brokerage firm Aldesa, the price of oil has had three stages during 2016. At the beginning of the year continued the downward trend to reach $ 30 per barrel in late January to gradually recover until the end of May, reaching $ 50 a barrel. However, as they had foreseen, during the last three months, the trend reversed again and it’ss currently trading around $ 40.
It has also shown the lack of cooperation among member countries of OPEC to reach an agreement and limit their production, and it was rather clear that major producers such as Saudi Arabia and Iran aimed to increase their market share, taking advantage of low prices to discourage other competitors, mainly America.
In July, Saudi Arabia reached a figure of record production, meaning it continues with the strategy to achieve a greater market share, because although between June and August the country tends to increase its production by increased demand, compared to 2015, this year it actually reduced it.
Both Saudi Arabia and Iran are close to reaching their production limits, so that might require important investments to increase their capacity and higher prices to invest, giving some possibility of cooperation between countries.
However, for the coming months, it is possible that the priorities of producer countries continue as in recent months, increasing the supply, so that, without significant demand pressures, prices may continue fluctuating between $ 40 and $ 50 per barrel. That is, levels lower than the $ 55 stated in the Central Bank’s Macroeconomic Program for 2016.
For Costa Rica this is positive, because it favors the economy with lower oil bill, avoiding pressure on the exchange rate and inflation, and thus contributing to the goals of the Central Bank and macroeconomic stability.