The European Union could save up to $80 billion in energy imports if oil prices remain low, providing some relief to households and companies in a region that has been laid low for the last five years.
The price of oil LCOc1 has dropped over a quarter since the summer to below $85 per barrel, a level last seen in June 2010.
Energy imports for oil, natural gas and thermal coal cost the European Union around $500 billion in 2013, with three quarters of that being spent to buy oil, Reuters research shows.
This year’s figure could fall by almost $25 billion to around $485 billion, and if oil prices average below $90 a barrel next year, the overall import bill could fall as low as $425 billion, over $80 billion less than paid by the EU for imports in 2013.
Falling energy prices reflect a darkening world economic outlook but they could temper any new downturn.
While headline inflation rates could be pushed lower, households and energy-intensive industries in countries that rely on oil imports will find their costs reduced, raising at the margin their ability to spend and invest.
“Global oil prices have fallen in almost every currency and that should lead to a boost in consumption,” Bank of America Merrill Lynch said on Wednesday.
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