In terms of fundamentals, Brexit won’t have a serious impact on the situation in the global oil market, according to the Head of the Department for Strategic Studies in Energy of the Analytical Center Alexander Kurdin. In an interview with REGNUM correspondent he noted that the UK’s economy has always been viewed separately from the rest of Europe because it’s not part of the Eurozone and thus has always had a degree of economic autonomy.
Brexit won’t have a global impact on the oil market
The expert also noted the possible negative influence of the political factor on economists’ decisions. "The political division may be interpreted as a negative signal because economists traditionally view integration as an opportunity for further growth while disintegration will most likely be regarded as a negative factor for economic growth in both Britain and the EU, meaning that oil prices may temporarily fall until the more powerful fundamental market factors kick in," Mr. Kurdin noted.
The expert also believes that in the near future oil producers won’t be taking any global steps to stabilize the market. "In the current situation it’s highly unlikely that any oil producers will be taking any deliberate steps independently, let alone in coordination with each other, to stabilize the market. However, if prices go down that in itself will have a stabilizing effect as it will put the brakes on new investments in the complex and ultimately lead to a decline in production. In the meantime, in recent weeks we’ve been seeing a moderate increase in output that can potentially make the glut of oil worse," Mr. Kurdin stressed.
Source: IA REGNUM