The limited supply and inoperative shale in the United States puts the price of oil: United States limited supply inoperative shale raises oil price - experts do not rule out that it exceeds 100 dollars.

The world is watching how inflation can alter the preconditions that had been set.

One of the products that is in the focus for the upturn in prices that is generating is oil. The barrels of Brent and WTI have already exceeded the highs of 2019 and, with expectations about the upturn in activity, experts begin to see that black gold can return to levels not seen since 2013: above 100 dollars.

Oil prices could rise above this level next year if demand trends continue to improve. This is at least how the Bank of America analyst, Francisco Blanch, sees it in a recent report to which the source had access.

The report gives more chances that the target price that many traders have already set on the horizon will be reached, but that so far has received relatively little support from Wall Street analysts. Brent crude oil, the international benchmark barrel, rose by about $ 15, which is its highest level since October 2018.

United States limited supply inoperative shale raises oil price

The asset has risen above $ 100 several times over the past two decades, but the chances of that happening again seemed to diminish as industry dynamics changed.

"Shale drilling in the United States became so productive in the middle of the last decade that it seemed that supply would always remain high enough to keep prices down, regardless of what OPEC and other oil-producing countries did,” RBC Capital explained in a note distributed to its customers.

"It is almost certain that electric cars will cause a drop in oil demand, but last year those assumptions were reversed," they add.

United States limited supply inoperative shale raises oil price: From Trafigura Group to Goldman Sachs Group, they also specify that oil could reach $ 100 again under the right conditions.

The increasingly optimistic outlook for oil adds to the pressure on the Saudi-Russian-led OPEC + coalition to limit production. While Riyadh has indicated that he prefers to act with caution, an increasingly narrow global market could force the alliance to turn on the taps a little.

COVID-19 caused fuel prices to fall and forced producers to slow down drilling speed. However, what followed came as a real surprise to market players.

United States limited supply inoperative shale raises oil price

Instead of returning to their old ways when fuel demand rebounded again, most producers held back to save liquidity and keep their balance sheets low: US oil production is almost 12% below peak levels, and few analysts expect activity to re-energize.

OPEC has also restricted drilling. ” That means that the demand for fuel is increasing, but the supply has not yet recovered, which pushes prices upwards, " said JPMorgan in a recent note.

Oil that had been stored during Covid closures has already been extracted and used, and oil inventories are below their historical levels in developed countries.

United States limited supply inoperative shale raises oil price: Blanch does not expect oil to remain above $ 100 a barrel this year, but he believes it could briefly reach that level next year. "The target price for Brent is $ 68 this year and $ 75 in 2022, with peaks that can exceed $ 100," he says.

The expert thinks that there are 3 main factors impaling price increases.

"First, there is a lot of demand for repressed mobility after restrictions for 18 months,” he writes.

“Second, public transport will be delayed, which will increase the use of private vehicles for an extended period of time, while, third, prepandemic studies show that teleworking could move in more kilometers driven, since working from home sometimes translates into developing some activity from the car,” he says.

Bank of America analyst Doug Leggate as a result of this scenario adjusts his recommendations on oil-linked stocks in light of the new target prices. "Now is not the time to sell any assets and we have upgraded Marathon Oil's rating to neutral,” he says.

His favorite names are Exxon Mobil, Occidental Petroleum, Hess, Diamondback Energy and Devon Energy.

United States limited supply inoperative shale raises oil price

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The rise of the SMI by 22% in 2019 reduced the wage inequality between sexes, but there are other gaps: the differences between autonomies are almost 10,000 euros

The INE has just released the employment data for the year 2019 and there will be those who see the glass half full or half empty. The Annual Wage Structure Survey shows some positive figures and others that might seem so a priori, but they are not so positive.

For example, the average annual profit per worker increased in 2019 by 1.6% compared to 2018, reaching almost 24,400 euros. This growth was the year that the Government chaired by Pedro Sánchez agreed to raise the minimum wage was 22.3%, of the 735,90 euros that was fixed before upgrading to the 900 euros monthly spread across 14 pays settled finally.

The measure has therefore led to a general rise in wages, although it has not affected the majority of workers. Specifically, it concerns 18.2% of the total, although many more women than men: 25.72% compared to 11.12%. The explanation provided by the National Institute of Statistics refers to the increased temporary employment suffered by women.

The gender pay gap, one of the classic problems of the labour market in Spain, has been reduced significantly, to 19.5%, the lowest percentage in 10 years. This means that, on average, a woman earns 80.5% of what a man earns, although the average wage of women has increased by 3.2% compared to 0.7% of them, which explains the reduction of the gender pay gap.

As the press release issued by the INE highlights, "this difference between the remuneration of men and women is reduced if similar jobs are considered". That is, they have the same occupation, type of contract or type of day.

This last indicator is key and helps to understand part of the existing labor inequality. Full-time workers earn an average of 16.58 euros per hour, while part-time workers were paid an average of 11.71 euros per hour.

The type of contract also delves into this gap. Workers with indefinite contracts had an average annual salary of 26,459 euros for the 17,932 euros of those with a fixed-term contract.

But some of the deepest gaps occur depending on the autonomous community and the nationality of origin of the worker. The differences between autonomies draw a very heterogeneous country in terms of wages.

For example, a Basque, Navarrese or Madrilenian worker earns almost 10,000 euros more on average than an Extremadura, Canarian or Castilian-Manchego worker. The extremes range from the 29,476 euros of average annual salary of a worker in the Basque Country to the 19,940 of one in Extremadura. The reason, according to the public body corresponds to "the different employment structure in each community".

Regarding nationality, the INE points out that "workers of Spanish nationality were the only ones who had a salary above the average in 2019". The commented 1.6%. On the contrary, workers from other European Union countries received 14.8% less on average compared to 2018 and those from outside the EU had to face wage cuts of 29.3%.

For the Unión General de Trabajadores (UGT), the aforementioned increase of 1.6% in the average annual wage per worker represents a "moderate" advance, since "although it grew above the CPI (0.7%), it only obtained a gain of buying power of nine tenths, taking into account that the context was expansive, with an increase in GDP of 2% and employment of 2.3%".

The union recalls in a statement that, although that average salary reached 24,396 euros, the median salary (which divides workers in two equal parts between those who earn the most and those who earn the least) remained at 20,351 euros. And that the most frequent salary was only 18,490 euros.

Now it remains to know the definitive data of 2020, when the coronavirus pandemic started, and also to know if the Executive will finally implement a new increase in the Interprofessional minimum wage to reach 60% of the average wage.

"Spain is still a country with low wages, so profound changes are demanded to correct this problem. Otherwise, the way out of the current crisis will be built on the basis of an increase in inequality, again compromising the degree of social cohesion", they add from UGT.