GLOSSARY

BRENT

21 June 2020 By PDSNET

A type of oil which is produced in the North Sea. Brent generally trades at a higher price than other types of crude oil and it is not produced by countries in the Middle East or America, so it provides a good benchmark for the market price of oil. The price of Brent initially fell heavily with the spread of COVID-19, but recovered quite quickly as various countries ended their lockdowns and returned to more normal business activity. Obviously, South Africa imports most of its oil so the US dollar price of Brent is vitally important for the price of petrol and diesel in this country and that impacts on our inflation rate. Consider the chart:

North Sea Brent: March 2020 - November 2021. Chart by ShareFriend Pro.

 

Here you can see that since the low point associated with the pandemic in April 2020, the price of Brent has been rising steadily within clearly defined channel lines. We expect this trend to continue as the world economy recovers.

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