Oil market
August began with raise of quotation of Light Sweet up to absolute maximum at the level of $78.77 per barrel. The President of Venezuela, Ugo Chaves, said that on the background of the worldwide crisis provoked by excessive consumption, the oil prices in the world market are moving towards $100 per barrel. The President of Venezuela called on the markets 'to prepare for such price level'.
The head of the Fundamental Analysis Department of 'Otkrytie' ('Opening') financial corporation, Natalia Milchakova, agrees that the tendency is right. The increasing demand in Asian countries and very low rate and volume of production by OPEC countries and most of developed and developing countries stimulates decrease in supply resulting in increasing prices. She does not rule out that by the end of 2007 the price for oil can rise to $80 and even more, while $100 per barrel is possible for 2008.
On the other hand, according to the senior analyst of 'Antanta Capital', Timur Khayrullin, the price of $100 per barrel is unlikely to appear in near future. Certainly, there are factors which stimulate rise in oil prices, which are increase in demand for hydrocarbons in dynamically developing Asian countries, tensions situation in oil processing field, height of hurricane season, unstable situation in the Middle East, and active part of investment funds in goods market. Nevertheless, the situation did not change fundamentally compared to the period when the price for oil was $40 per barrel. Thus, the expert expects the prices for oil to remain at the present level in near future. A jump in prices can occur only in case of force majeure conditions, for instance, a war in the Middle East.
An analyst of Kapital investment group, Mikhail Pak, confirmed the aforementioned forecasts. He also does not believe that in near future price for oil can reach $100 per barrel. At present the speculative constituent in oil prices, which includes threat of hurricanes, instability in Nigeria, as well as the problems with American oil-refineries, is high enough. Moreover, a possible crisis in American stock scenes can touch oil market, thus, after taking a bath in stock exchange the investors can begin to fix their profits in oil futures in order to cover the losses.
Meanwhile, unlike Russian experts who are calm as regard the prospects of dynamics of oil quotations, the International Energy Agency expresses apprehension that in near future the prices for oil can dramatically rise, if OPEC retains oil production at the same level. The Agency vainly tried to persuade oil cartel to increase production, however, judging by the statements of OPEC representatives, oil quotes are unlikely to be risen at the next meeting in September (the matter is likely to be postponed to December). Notably, at the beginning of August OPEC stated that the world market was provided with oil at an adequate level, despite the jump in prices and that OPEC had no necessity to increase oil supplies in the 4th quarter of this year.
Several member countries of oil cartel at a time stated invariability of oil production level. Oil Minister of Venezuela, Rafael Ramirez, stated that Venezuela considered it necessary to retain oil production at the current level. Venezuela has plans to make adequate statement at the upcoming meeting of oil ministers of cartel member-countries in September. The largest world oil exporter, Saudi Arabia, also reported that level of oil supplies would not change in September.
It is not ruled out that along with the expectations of OPEC's retaining of quotes, increasing fuel demand on the threshold of winter season, as well as drop in oil reserves of the Unites States (along with additional risks of decrease in supplies from Venezuela), world oil prices will really still increase in near future, but more gradually than Venezuelan President forecasts.
Currency market
Last week the official rate of the manat against the US dollar, set by the National Bank of Azerbaijan rose by 0.0001 points or 0.01%. The average rate was established at 0.85382 to 1 US dollar.
Last week the maximum rate of the US dollar against the manat was established on 8 August (0.8539 manats to 1 US dollar) and same rate was established on other days (0.8538 to 1 US dollar).
As a result of last week's exchange rate of the Azerbaijani manat against the US dollar, established on the basis of results of the Baku Interbank Currency Exchange (BICEX), decreased by 0.0001 points or 0.01%. The average rate was fixed at 0.85198 to 1 US dollar
Last week the maximum rate of the US dollar against the manat was established on 8 August (AZN 0.8526 to 1 US dollar), the minimum on 6, 7 and 9 August (AZN 0.8518 to 1 US dollar).
Deals concluded last week at BEST with transition to currency (T+0) comprised $11.76mln with an average sustained exchange rate of 0.8518 AZN/USD on 6 August, $8.922mln with an average sustained rate of 0.8518 AZN/USD on 7 August, $5.66mln with an average sustained rate of 0.8526 AZN/USD on 8 August, $15.9mln with an average sustained rate of 0.8518 AZN/USD on 9 August and $13.29mln with the rate of 0.8519AZN/USD on 10 August.
No deal was concluded with USD/AZN T+1, T+2 and SWAP_USD/AZN due to an absence of appeals by dealers. The banks did not make appeals for RUB/AZN and EUR/AZN instruments at BEST.
Privatization Shares Market
In this period the price of vouchers remained unchanged as compared to the previous week and made up AZN 11. The allocation of privatization vouchers expires on the 1 January 2008.