WHILE most of the country is living with a situation that hasn’t been experienced in a generation, the global oil price slumped to an almost all-time low.
Currently, Brent Crude (one of the benchmarks of global oil pricing) has sunk to a $19.44 a barrel, a drop of 44% from April 3rd – reported by Oilprice.com. And it’s not just Brent crude that’s on a downward slope, Louisiana Light has slid so far it’s currently trading at -$34 a barrel, a drop of over 250% at the time of writing.
Now, first off; oil sitting in negative figures on the global market doesn’t automatically mean that we’ll be getting paid to fill up our tanks. The figures are more of a demonstration of the commodities buying power on the global stage. It is though symptomatic of a very real global problem. With fewer people riding, driving, flying, and sailing, sales of everything from petrol, diesel, and aviation fuel are plummeting. And the fuel companies are running out of space hence the theoretical negative equity the product now finds itself residing in.
While a low oil price might seem like a good thing for road users, its scant recompense given the situation most of the globe finds itself in. But there is one market that could be hit worse than any other in all this – the global electric and alternative fuel sector.
Say for instance this global slump really does become a longer-term issue, why would somebody want to swap out their petrol-powered bike for a (supposedly) more efficient and environmentally friendly electric motorcycle?
Granted there are government schemes in place to try and entice users away from gas-guzzlers and onto new electric machines, but to start with EVs are already more expensive (when comparing like for like) than their petrol-powered competitors.
What happens when the global oil price recovers?
Look, I’m not saying that any of the above is totally going to happen when the COVID-19 restrictions lift the market may go back normal and the pumps will again flow with petrol and the world begins moving again. But it does go to show how delicate the global market is to the oil price, and should something come along again further down the line that has a similar effect on the markets, could they recover again?
Today though, perusing the electric bikes on offer from the likes of Zero, Energica and Harley-Davidson, that £1,500 electric vehicle grant has never looked such a bad deal…
