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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.

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

Follow us on Twitter @AzerNewsAz

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