– Demand dictates the price of oil; if oil producers increase production without any regulation, and regulation no longer exists, then a further decline in oil prices is the only thing that follows, commented energy expert Davor Štern on the announcements that Libya and Nigeria plan to increase oil production.
When asked how this will reflect on the Croatian market, Štern responds that the increase in GDP and other economic indicators is partially explained by the decline in oil derivative prices, so it is possible that with further price declines, this impact will continue, but he does not believe that there will be a general decline in prices.
– The decrease in oil prices will be felt through increased profits of companies that use its derivatives, but I do not believe that there will be a decline in market prices. It is unlikely that individuals will feel this through a decrease in the prices of bread, milk, newspapers, and other goods.
– As for domestic oil production, we will not have any benefit in that segment considering that this process is quite expensive, said Štern, who believes it is difficult to predict how long such a situation in the oil market could last.
– It is unpredictable how long this trend will last. Prices will fluctuate between $40 and $50 per barrel, and it cannot go lower than $40. Whether the price will be $45 or $40 is no longer a big difference, especially if we recall the spikes from the past. This situation could last if no global event occurs that could trigger a rise in oil prices on the global market, concluded former Minister of Economy Davor Štern.
