Global economic activity declined in the last half of 2018 and also in the first half of 2019. This movement was due to uncertainties related to the drop in the volume of international trade, largely due to trade conflicts – mainly between the United States and China – but also due to doubts regarding economic growth in the United States and China, Brexit and the threat of recession faced by countries in the Eurozone.
This global slowdown influenced the fall in commodity prices, which also affected prices in the Brazilian market, with the IC-Br (Brazil Commodity Index) falling by 6,1%, as a result of the decline in its three components: Energy (-10,9%), agriculture (-5,8%) and Metals (-1,6%).
Macroeconomic indicators already released show that the first half of 2019 was marked by good and bad results.
Commodity volatility.
Commodities are goods traded on stock exchanges around the world. Their prices are set on the international market and historically they have high volatility, as they are influenced by several factors: climate, demand, supply, stock levels, among many others that somehow cause fluctuations.
For example, when observing oil prices in the first half of 2019, it is important to highlight the factors that influenced prices. At the beginning of the year, oil barrel prices were at their lowest levels due to high inventories and expectations of increased production in the United States.
In April, with the announcements of new production cuts in the countries that are part of the Organization of the Petroleum Exporting Countries (OPEC), in addition to sanctions imposed on Iran and Venezuela, there was an expectation of pressure on supply, but this did not materialize. Since then, the price began to fall and in June the barrel cost US$ 60,55 (compared to US$ 74,11 in April).
This drop was caused by the escalation of trade tensions between the United States and China. With the trade war, the global economy is expected to weaken, causing a reduction in demand. In addition, high levels of oil inventories in the United States should contribute to maintaining the price of a barrel at the current level.
Gasoline and Diesel
Following the oil price, the two fuels have behaved similarly. They rose at the beginning of the year, but, responding to the drop in the price of a barrel of oil, they now have slightly lower prices for sale to gas stations. In July, Petrobras reduced the price of gasoline and diesel at refineries by 4,42% and 3,84% respectively, the lowest value since February.
For the second half of 2019, the outlook is for stability until the end of the year. Considering oil stocks in the United States and the prospect of softer global demand, there is no room for a strong change in prices in the coming months.
The purchasing sector is facing a political and macroeconomic scenario marked by several changes. Trade conflicts, a slowdown in the global economy and the threat of recession, including in Brazil, are just some of the challenges faced by companies. COSTDRIVERS has prepared a report that provides an overview of the global and Brazilian economies and presents the trends for the second half of 2019. Download the report to understand how these changes impact the purchasing sector.
