CBA says oil prices drop range in 2014 was greater than drop on other items
By Amina Nazarli
The average price for oil on world markets will amount to $56.73 in 2015 and $63.88 in 2016, according to the IMF, said the report on monetary policy of the Central Bank of Azerbaijan (CBA) for 2014 published on February 26.
The report reads that the end of the reporting period, the price for Brent crude oil fell by 43 percent compared to the beginning of the year. The average price amounted to $99 per barrel, which is 9.2 percent lower than in 2013 ($ 109).
“The prices of oil on world markets were adversely affected by such factors as an increase in military-political tension in the major oil-exporting countries, the decline of global demand, maintaining the level of oil production by OPEC countries at the same level, the growth of shale oil production in the United States,” the document said.
“Since 1984, five episodes of more than 30 percent fall of oil prices were observed during six months. In 1985-1986, the price of oil decreased by 67 percent and fell from $31.72 to $10.42 per barrel, and in 2008 it decreased by 72 percent and fell from $146.08 to $36.61 per barrel.”
The main difference between a sharp fall in prices in 2014 from a similar event in 2008 is that this time, the range of oil prices fall in comparison with the prices for other goods was much greater, according to the report.
Since the second half of 2014, the fall in the indices of prices for energy resources, metals and minerals, agricultural products has accelerated. During the last year, the price index for goods fell by 29 percent, and by 6.4 percent for food products. The negative trend in prices is due to supply and demand factors, the CBA report said.
The average price for AZERI LT, exported from Azerbaijan via the Ceyhan, Batumi and Supsa ports to Italian Augusta port, was $114.08 per barrel in June 2014(in the beginning of oil prices fall). At the same time, in December 2014, the average price for Azerbaijani oil was around $65.13 per barrel. Thus, the fall of prices for AZERI LT was 42.91 percent.
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