This Wednesday the crude West Texas Intermediate (WTI), which is traded on the New York futures market (Nymex), rose 4% to u $ s43.39 el barrel in contracts with delivery in September. While the Brent, which is listed on the London electronic market (ICE) and is a reference for Argentina, is traded at u$s46,06, with a growth of 3.67% for its delivery in October.
DNU 488/2020, which established the return of the “Creole barrel” until December 31 to protect jobs and maintain investments, also included pressures if the value of Brent exceeded $ 45 for 10 consecutive days. In that case, the same rule provides for an immediate suspension of compensation:
“In the event that, during said period, the price of the” ICE BRENT PRIMERA LÍNEA “exceeds US DOLLARS FORTY-FIVE per barrel (USD 45 / bbl) for TEN (10) consecutive days, considering the average of the last FIVE (5) quotes published by the “PLATTS CRUDE MARKETWIRE” under the heading “Futures”, the provisions of this article will be without effect “, supports the first article of DNU 488.
For companies, exceeding US $ 45 per barrel of oil is not just good news for their sales. The DNU established that during the validity of Article 1 – which in this case would cease to have it in nine days -, The producing companies will not access the exchange market for the formation of foreign assets nor will they acquire securities in pesos for their subsequent sale in foreign currency or transfer of custody abroad. Therefore, in the next few days, companies could re-dollarize their portfolios.
At the same timeIf the DNU loses validity, the refiners and marketers may carry out import operations for products that are available in the international market.
Article 4 of the decree announces a quarterly review of the Creole barrel, in charge of the Secretariat of Energy, under the Ministry of Productive Development. The text holds that Matías Kulfas and Sergio Lanziani has the “power to modify quarterly “ the price of crude oil from the “creole neighborhood”, as well as periodically reviewing the scope of the measure arranged on the basis of parameters of production volume and levels of activity and investment.
Does the Creole barrel rise to $ 50?
In the last weeks Ambit He realized that the governors of producing provinces declared themselves on alert for a lower collection of royalties and demanded to respect the support price. For every barrel that is sold in the country, the provinces receive a percentage, and in the last three months of the pandemic, they have not stopped charging them, which relieves their coffers and allows progress with public health policies.
But before some breach of the price of US $ 45, the 10 districts nucleated in the Federal Organization of Hydrocarbon Producing States (Ofephi) are working on a document that reveals the degree of compliance with the decree, and the reality will be seen there.
In Neuquén the government of Omar Gutierrez days ago, it measured the estimated amount of royalties to be claimed for the lower price, which is of the order of $ 280 million. In Santa Cruz, Chubut and La Pampa, they also detected under-invoicing and activated legal claims.
What will happen to the zero retentions on hydrocarbons?
In the case of withholdings to hydrocarbons, which the decree reduced them to 0%, which caused a strong incentive to export Vaca Muerta products, DNU 488 contemplates a progressive increase based on the improvement of international prices.
Article 7 enables the Government to evaluate the average prices for the days that have passed in the current month and will compare them with the current average price. “If there is a difference of more than 15% between the two, it will set a new price (for withholdings), which will be applicable as of the next business day”, indicates DNU 488.
- The 0% rate applies in cases where the International Price is equal to or less than the Base Value.
- 8% rate in cases where the International Price is equal to or greater than the Reference Value.
In those cases in which the International Price (PI) is higher than the Base Value and lower than the Reference Value, the tax rate will be determined according to a formula: Quotient of (PI – VB (u $ s45)) over (VR (u $ s60) – Base Value (u $ 45)), multiplied by 8.
The “International Price (IP) is defined by Energy and is obtained from the average of the“ ICE Brent first line ”price of the last 5 quotes published by the“ Platts Crude Marketwire ”, under the heading“ Futures Settlements ”.
Is there an increase in fuel prices?
The current international oil prices also encourage the thawing of the value of fuels, spawned since the end of 2019. This Wednesday, the president of YPF, Guillermo Nielsen, was in favor of an increase in the pumps, although he avoided going into details and swampy areas, from the political point of view. “The delay in fuel prices is very significant,” he acknowledged in dialogue with Radio 10.
Minister Kulfas wanted to sustain the prices of frozen gasoline and diesel until October, but in the sector they do not rule out a reversal, with some release around 5% to 10%. What is confirmed is that the taxes on liquid fuels (ICL) and carbon dioxide (IDC) will not be updated until October 1.
Along the same lines, Ámbito revealed that the oil unions began to annul emergency agreements due to the pandemic, which included suspensions and salary cuts of up to 40%, and press for salary improvements. More than 25,000 oil tankers were in quarantine and paralyzed between April and May and revenues fell, they say. It is expected that with the slow recovery of production many will return to their positions in the coming days. Everything indicates that the new oil bubble is about to burst.