53 The Business of Ontario Agriculture Better Farming | December 2023 crude oil supply. The issue is that as global demand has remained buoyant, global supplies have been tight, especially due to production cuts by OPEC-plus countries (OPEC+). The global crude oil supply-demand situation could remain in a deficit in the fourth quarter of 2023 by as much as 3.5 million barrels per day. Global oil inventories are low, and production cuts by OPEC+, especially Saudi Arabia and Russia, could lead to more inventory draws over the next few months. The war in the Black Sea region has already been fueling global inflation since last year, which has been the main reason why central banks across the world have been raising interest rates sharply. If the Middle Eastern oil producing countries, specifically Iran, get drawn into the conflict in Israel, we could have higher inflation and interest rates for longer. Led by Saudi Arabia, OPEC+ are unlikely to reverse their crude oil production cuts until prices have risen to uncontrollable levels. If it expands, this latest “black swan” event could turn out to be the biggest risk to global crude oil supplies and prices since 1974 as memories of the U.S. oil embargo from 1973-1974 come to mind. By the end of the embargo in March 1974, the global cost of oil had climbed nearly 300 per cent. U.S. inflation surged from 3.2 per cent in 1972 to 11.04 per cent in 1974, while economic growth fell from 5.6 per cent in 1973 to negative 0.5 per cent in 1974. The conflict in the Middle East could also pressure global fertilizer supplies and tighten exports, leading to higher prices. In fact, 50 per cent of all global urea exports travel through the Suez Canal in North Africa and the Middle East, and if the flow of crude oil and fertilizer supplies are jeopardized, it will add to higher prices. Important global potash supply is in jeopardy as Israel’s key port operations are impacted by the war. If we add higher U.S. and European natural gas prices – key feedstock for nitrogen-fertilizers – the fertilizer price pain could be aggravated. The impact of this war in the Middle East on crude oil and fertilizers could be more immediate and limited. It’s unlikely to lead to prices staying very high for very long. Nonetheless, prices could stay elevated for longer if the war spreads. If fears of escalation grow, the risk of a supply disruption will also grow. BF Visit your local ECHO Dealer for more information: Ancaster, Crossroads Equipment .................... 905-648-8001 Ayr, Ayr Turf & Trac ............................................ 519-632-9901 Barrie, McGill Equipment ................................. 705-503-7732 Blenheim, Southwest Small Engine Sales ...... 519-676-8938 Brant County, Town & Country Sales & Service.. 519-484-2901 Brantford, Antler Services Inc ......................... 519-753-6433 Brodhagen, B&K Tire and Battery ................... 519-345-2248 Cambridge, Vincent Lawn & Garden Equip. .... 519-621-7805 Castleton, Doug’s Small Engines .................... 905-349-3027 Chesley, Robert’s Farm Equipment ................. 519-363-3192 Dundas, WPE Landscape Equipment .............. 905-628-3055 Grimsby, Ag & Turf Power Service ................... 905-945-4848 Hamilton, Outdoor Supplies & Equipment ...... 905-578-2411 Ingersoll, Ken’s Small Engines ....................... 519-425-4466 Meaford, Robert’s Farm Equipment ................ 519-538-1660 Millbank, Zehr’s Sales & Manufacturing .......... 519-595-7579 Mississauga, WPE Landscape Equipment ..... 905-569-2055 New Dundee, Coleman Equipment ................. 519-696-2213 North Bay, Hamelin’s Outdoor Power Equipment .. 705-497-8676 Orillia, Allan Byers Equipment ......................... 705-325-2746 Owen Sound, Bobcat of Grey Bruce ............... 519-372-9100 Pembroke, AJ’s Power Products .................... 613-735-6788 Rockwood, Connect Equipment ..................... 519-856-9512 Stirling, McIntosh Motors ................................ 613-395-3757 Vars, M.R. Blais Sales & Service ...................... 613-443-1230 Walton, Robert’s Farm Equipment .................. 519-887-6365 Windsor, Vehicle Venture ................................. 519-966-8642 POWER & PERFORMANCE. EVEN THE MOST DEMANDING JOBS ARE NO MATCH FOR THE WORLD’S MOST POWERFUL BACKPACK BLOWER! ECHO CHAINSAWS PROVIDE THE POWER AND DURABILITY TO MAKE LIGHT WORK OF THE TOUGHEST JOBS. CS-4920 CS-590 CS-7310P 50.2 CC 59.8 CC 73.5 CC Available in 16”, 18” & 20” bar lengths Available in 18”, 20” & 24” bar lengths Available in 20”, 24”, 28” & 32” bar lengths ECHO.CA PB-9010 79.9 CC 48N Blowing force Hip or tube throttle available DEBRIS DOESN’T STAND A CHANCE. MSRP STARTING AT $61995 MSRP STARTING AT $69995 MSRP STARTING AT $1,72995 MSRP FOR ONLY $94995 Moe’s Market Minute MOE AGOSTINO & ABHINESH GOPAL Maurizio (“Moe”) is chief commodity strategist with Farms.com Risk Management and Abhinesh is head of commodity research.
RkJQdWJsaXNoZXIy NTc0MDI3