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Oil prices go down

10 June 2016 15:19 (UTC+04:00)
Oil prices go down

By Fatma Babayeva

Oil prices experienced a slight decrease on the world market on June 10.

The Price of August futures of Brent crude fell by 1.08 percent to $51.39 a barrel in London ICE on June 10 [4:12], while July futures of WTI crude saw a decrease of 1.07 percent to $50.02 a barrel in NYMEX on the same day [4:11 am].

A barrel of Azeri LT CIF produced at the Azeri-Chirag-Guneshli block of oil and gas fields cost $52.20 at the Italian port of Augusta on June 10, which is $0,17 or 0,32% less compared to the previous day.

Meanwhile, OPEC’s oil basket price is only moving upward since the beginning of June by reaching at $48.02 on June 9.

The recent rise in oil prices was related to the decline in the U.S stocks of crude oil three weeks in a row and supply disruptions in several oil producing countries like Nigeria, Canada and Libya.

Various international agencies and consultation companies expect average Brent price to a bit exceed $44 a barrel this year. Regarding the next year, the figure will go up to $55-56 a barrel, they say.

In the meantime, average WTI prices will amount to $43 and $45 a barrel in 2016 and 2017, respectively.

Nevertheless, the International Monetary Fund (IMF) makes pessimistic forecasts for average prices of crude benchmarks to stand at $36 a barrel in 2016 and $42 a barrel in 2017.

Goldman Sachs forecasts average Brent prices to equal to $50 a barrel during the second of the current year.

The World Bank forecasts that the average crude price will be $41 a barrel in 2016 and $50 a barrel in 2017.

The U.S. Energy Information Administration projected Brent prices to amount $43.03 a barrel and $51.82 a barrel respectively in 2016 and 2017, while expecting WTI prices to amount to $42.83 and $52.82 for the same period.

Furthermore, JP Morgan forecasted Brent prices to total $45.3 a barrel and WTI prices at $44.66 a barrel in 2016, whilst expecting them to around $55 in 2017.

Citigroup estimates Brent prices to equal $47 a barrel in 2016.

Climbing USD value is also having a downward pressure on oil prices currently. Increasing oil prices also stimulates oil rigs of the U.S to come back online which could oversupply the market again.


Fatma Babayeva is AzerNews’ staff journalist, follow her on Twitter: @Fatma_Babayeva

Follow us on Twitter @AzerNewsAz

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