Oil price has jumped 56% in a year
The rally is not fully reflected in locally traded African producers, with Sasol share price weighed down by its Louisiana chemicals project
Oil prices started the year on a high note, as Brent crude added 2.3% to $58.11 a barrel on Tuesday from $56.80 a barrel on the last trading day of last year. Since January last year, oil has risen more than 56%. Its surge over the past month was prompted by agreements on production cuts by several major producers, though many analysts are sceptical about how effective they will be. SA is a price taker on oil and gas since it has no domestic production. The nearest substantial oil and gas resources are in Mozambique and they are in the early stage of development. But oil prices, together with rand-dollar exchange rates, affect share prices of SA’s only gas and liquid fuels company, Sasol, and to a lesser extent those of other African producers listed on the JSE: SacOil Holdings and Oando. The rand price of oil also influences inflation. From Wednesday, motorists will pay between 48c and 50c a litre more for petrol, and 37c to 39c a litre more for diesel. Higher oil prices will incen...
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