Baku, Azerbaijan, May 26
By Aygun Badalova - Trend:
The price for North Sea Brent crude oil for the first time in 2016 exceeded $50 per barrel. On May 26 morning, during a trading session at the London ICE Futures Exchange, the July futures for Brent rose 0.6 percent to $50.04 per barrel.
Surplus in crude supply, a problem that the OPEC hasn't been able to solve until now, is the main reason for a prolonged drop in prices in global oil markets.
The last meeting of oil producing countries in Doha ended in failure due to the non-participation of Iran and Libya in the plan to freeze oil production at the January levels.
However, despite the failure in Doha, the oil prices began to rise gradually, especially in April.
On April 8, Brent Crude Oil Spot Price was $40.71 per barrel compared to $37.15 per barrel on April 7.
The average price for the North Sea Brent oil was $46.02 per barrel in May, that is, $4.44 per barrel more than the average price in April, but $18.05 less than the average price in May 2015.
The average price for Brent oil was $37.45 per barrel in January-May 2016, that is, $19.42 per barrel less than in the same period of 2015.
Additional oil supply from Iran, which contrary to expectations is rapidly increasing oil production, has been compensated by the oil supply failure in Canada and Nigeria the last month.
Currently, the market expectations are related to the upcoming OPEC meeting in Vienna on June 2, which will discuss the issues of changing and distributing the production quotas among the OPEC members.
Despite the current relatively positive trend in oil prices, analysts do not expect significant growth in prices this year.
In particular, analysts of the American bank JP Morgan forecast the average price of $45.3 for a barrel of Brent oil and $44.66 for a barrel of WTI oil in 2016.
Analysts at the British consulting company Capital Economics forecast the price of $45 per barrel for Brent and WTI oil for late 2016.
According to the forecasts of the US bank Citigroup, the average price for a barrel of Brent oil will be $50 in the third quarter of 2016.
The Citigroup analysts forecast the average price of $65 for a barrel of Brent oil for late 2017.
Edited by EA
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