Five Reasons Why Oil Prices Rise Above $ 70 For The Second Time Since 2014

The price of crude Brent rose on Saturday above $ 70 for the second time in four years, and reaches $ 70.30 a barrel, a record that the government was counting on to regain the balance of the treasury revenues.

Snowstorms in Europe and the United States contributed to the increase in demand for oil and the decline in US inventories, which raised the price in a record time to more than $ 70, while experts said that if the situation continues until the end of 2018, the treasury will gain additional $12 billion and the amount of printed money will be reduced to only $ 6 billion, instead of $ 19 billion that were already announced by the Prime Minister, Ahmed Ouyahia.

The oil expert, Abderrahmane Mabtoule, said in a statement to Echorouk that five reasons behind the rise in the price of Brent crude during the past hours are preceded by snowstorms in Europe and America this week, which contributed to the increase in the demand for black gold in a record, where Snow covers the French capital of Paris, and is due to the decline in US stocks after the increased demand for it, and the reduction in the value of the US dollar, which ranges between 5 and 10%.

Mebtoul added that one of the main reasons for the rise in the price of Brent to more than $ 70 is the continuation of the conflict between Saudi Arabia and Iran, and the postponement of the sale deal of 5% percent of Saudi Aramco shares, considering that the interest of the Kingdom today lies in the completion of the deal successfully to keep the price of oil barrels above the threshold of seventy dollars, as this will raise the value of shares of Aramco, which will not be waived before 2019.

On the other hand, he considered that the recovery that is witnessed by oil prices will positively affect the revenues of the Algerian treasury, which set the oil reference price in the Finance Act for 2018 at $ 50 a barrel, and will earn, if the oil rate of $60 will reach $ 6 billion, which is $ 500 million for every additional $1 per barrel, but if the average price of a barrel rises to $ 70, it will earn $ 12 billion, which is a large figure according to the spokesman, which will reduce the printing of money in a standard way.

“The high price of oil would allow government to freeze the printing of $ 12 billion, or DZD 1,500 billion, of up to 150,000 billion centimes. The government, which had previously planned to print $ 19 billion in 2018, would only print $ 7 billion, noting that the initial reports refer to the printing of $ 5 billion since the beginning of the process by the end of 2017”.