Crude prices have impacted Britain’s leave of the European Union modestly, with Brent down just over $2 per barrel, 4 percent from previously reported on Friday at 0900 GMT.
The move was only the standard deviants compared to chances since nearly 26 years prior. Larger moves are all to common, meaning traders see limited impact for now from the vote to leave EU.
Consumption has been on the decline since 2005 with less than 1.6 million barrels per day, consuming 1.6 percent of the global total. Britain is only the 15th largest consumer, trailing behind other large countries such as the U.S, China and even Indonesia.
Whatever results from the vote, the impact on demand will not register right away globally. Only if the consumption decline spreads to the rest of the EU will there be a serious impact as they now only consume 11.1 million bpd, slightly less than China. But Europe’s consumption has also been declining since 2005, causing a modest impact on global demand.
Perhaps the largest threat is if troubles in financial Europe trigger widespread economic hits in the U.S and Asia. Thus far, things lean toward normality; but that could change quickly as consequences surface from the vote.
Article written by HEI contributor Marcela Abarca.