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Oil up, but at whose cost?

Tuesday, January 03, 2017 - 01:28

Oil prices hit 18-month highs as OPEC's deal with non-OPEC members to rein in supply takes hold. It's good news for producers, but as Laura Frykberg reports, protests at rising gasoline costs in Mexico show how the deal may claim casualties, too.

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A day after the OPEC deal to cut oil production kicked in.. And prices are finally picking up. Brent crude rose to over 57 dollars a barrel - its highest for 18 months. So too was light crude. But someone's gain is another's loss And in Mexico it's consumers now hurting. The cost of petrol there has increased 20 percent. (SOUNDBITE) (Spanish) DEMONSTRATOR, LUIS GOMEZ, SAYING: "This gasoline hike is laughable. To talk about gasoline costing this much when the minimum wage is 80 pesos ($3.86 dollars) is a joke." Mexico began phasing out government-set prices at the pump last year. The international increase in cost is another blow for consumers. It's a similar problem for other developing nations. If oil prices rise too much, other sectors could suffer. (SOUNDBITE) (English) LCG MARKETS ANALYST, JASPER LAWLER, SAYING: "The general thought process is that it's somewhere around the sort of 50 to 60 maybe 70 - at a push - dollars per barrel, if we start getting beyond that 70 - that's when we start to really worry that consumers are going to have to put more towards filling up the tank, rather than spending on other things and keeping the economy going." And that would lead to reduced demand. And once again hurt oil producers. Something they've probably had enough of already.

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Oil up, but at whose cost?

Tuesday, January 03, 2017 - 01:28