Rising oil prices aren’t great news for the car industry. If petrol becomes pricier, it may deter some consumers from buying a new motor.
But another issue is casting a shadow over the Paris Motor Show today – Brexit.
Dieter Zetsche, the CEO of Daimler, has warned that the risk Britain leaves the EU without a deal is a serious worry.
Zetsche told the Motor Show that:
“Possible scenarios are highly worrying. We have analysed possible scenarios since the (2016 Brexit) referendum to prepare ourselves.
In sum, it is an extraordinarily sad development.”
Peugeot is also concerned. Its European boss, Maxime Picat, told Reuters that its UK manufacturing could suffer if new trade barriers are set up after Brexit.
Picat warned:
“We’ve been doing all we can to develop our UK business, restore Vauxhall and Opel profitability, reinvesting in Luton and improving our sites’ competitiveness in order to help them face up to an uncertain future.
But there are limits. Those limits are customs barriers, and the loss of freedom of movement, for people and goods. If we get to that point, we will be obliged to take measures.
If we suddenly have to start manufacturing for the UK in the UK, and for Europe in Europe, there will necessarily be an impact on UK production.
OIl has “sprung another gusher overnight”, says Stephen Innes of trading firm OANDA, as he watches the US crude price hit a fresh four year high.
He believes the new USMCA trade deal is also pushing crude prices up:
Ultimately the markets remain singularly focused on the prospect of supply disruptions from Iran which is the primary driver of oil prices.
And of course, the US/Mexico/Canada trade agreement will have a longer-term positive impact on oil prices in a broader macro context.
