BizNews: Cees Bruggemans: Oil bonanza – what it means for SA

We’re used to feeling the pressure of rising oil prices, so what does the decline since mid-year mean for the South African economy? Cees Bruggemans, an independent economist, has put together a concise overview of the factors playing into oil price weakness. The oil price windfall is generally good news for South African consumers and businesses dependent on consumer spending, though there’s always the risk that the fuel levy could go up in February.

After rising from near $60 pre-2007 financial crisis to peak near $150 in 2008, thereafter plunging to below $40 through the early 2009 global recession, oil recovered to $120 by 2010, averaging $115 through mid 2014.

ut starting in June 2014, a new slide developed which became a free fall since September, last week reaching $76, with the full downside yet to be established (the International Energy Agency suggesting it will continue in 1Q2015, thereby opening up all kinds of fiestas regarding cause, effect & outcome).
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