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Further weakness of Brent expected

Oil&Gas Materials 25 July 2016 15:32 (UTC +04:00)
Some further weakness in the price of Brent is expected by the analysts of the British consulting company Capital Economics as high stocks of both crude oil and petroleum products weigh on demand.
Further weakness of Brent expected

Baku, Azerbaijan, July 25

By Aygun Badalova - Trend:

Some further weakness in the price of Brent is expected by the analysts of the British consulting company Capital Economics as high stocks of both crude oil and petroleum products weigh on demand.

Oil prices have been relatively calm over the last week compared to the volatility in the previous week, analysts mentioned in a report, obtained by Trend.

But on Fiday prices fell to their lowest level amid the concerns that the global oil market will remain oversupplied longer than expected.

On Monday oil prices fell again, holding near two-month lows.

Brent crude futures were trading at $45.45 a barrel at 0956 GMT, down 24 cents from their previous close, while US crude was down 25 cents at $43.94 a barrel, Reuters reported.

There is a growing concern that some of the increase in demand for crude oil from refineries is simply feeding through into an increasingly large glut of oil products such as gasoline, diesel and jet fuel, analysts of Capital Economics said in a report.

For example, product stocks in the US have surged to record levels even as crude stocks have been falling, they said.

While US production has been falling, crude inventories are at 519.5 million barrels, historically high for this time of year, according to the Energy Information Administration (EIA). U.S. crude and oil product stocks rose 2.62 million barrels to an all-time high of 2.08 billion barrels.

However, analysts do not expect oil prices to fall back to the lows seen earlier this year as production has fallen significantly and demand has risen strongly.

According to the forecasts of British analysts, Brent price will average $45 a barrel in the third and fourth quarters of this year.

In 2017, analysts forecast Brent average price at $50 a barrel for the first, $55 a barrel – for the second and $58 a barrel for the third quarter.

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