The price of Brent crude oil exceeded $89 per barrel for the first time since October 13, 2014. About it testify trading data on the ICE exchange.
89.02dollar
price of futures for March delivery per barrel of oil
Forecasts vary
Economist, director of the Energy Development Fund Sergey Pikin suggested that in the first quarter of 2022 the price of a barrel of oil could exceed $100. According to him, the upward trend in prices has developed due to the retreat of the coronavirus pandemic and the recovery in demand for oil. He pointed out that figures are already approaching pre-Covid requests.
However, according to analysts, by the end of 2022, the price of oil will remain at a level close to the beginning of January. The main reasons that will hinder the growth of quotations will be an excess supply on the world market and a decrease in demand due to new possible lockdowns in different countries. The minimum value is $65-75 per barrel, the maximum is $70-80 per barrel. The average value is $70.72 per barrel.
Oil did not help the ruble
The Russian stock market closed with a fall in the main indices following the results of trading on Tuesday, January 18. This is evidenced by the data of the Moscow Exchange. The Moscow Exchange Index lost 6.34 percent, while the RTS index fell 7.24 percent. The leaders of the fall were the securities of Sberbank, Norilsk Nickel, Gazprom, Magnit and Yandex – they fell by 3.44-10.14 percent.
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The collapse of the market against the backdrop of geopolitical tensions led to a sharp reduction in the value of ruble-denominated assets, in which more than a third of the funds of Russia’s main moneybox, the National Welfare Fund (NWF), were invested. As a result of December, the losses of the National Welfare Fund amounted to 320.9 billion rubles. Of these, 257 billion are associated with a fall in the value of shares of Sberbank and Aeroflot. The market was faced with the flight of investors from assets against the backdrop of the possible introduction of new sanctions by the United States. Washington is threatening to seriously tighten pressure if Russia invades Ukraine.
Redistribution of markets
On the eve it became known that Saudi Arabia agreed to provide about half of Poland’s oil imports by buying a stake in the large Orlen oil refinery in Gdansk. Eastern Europe was considered the Russian market for oil, but the situation may change. Orlen will receive from the Saudis up to 337 thousand barrels per day.
At present, Russia is the main supplier of oil to Poland. Recently, Poland began to buy less raw materials through the Druzhba pipeline and more through the terminal in Gdansk. The purchase of a stake in Orlen in many respects looks like “the Saudi invasion of the Russian market,” says Andrey Maslov, an analyst at Finam. He believes that Saudi Arabia will increase its presence and supply to European countries.
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In turn, Russia may increase sales of raw materials to the Asia-Pacific market, which is more attractive and promising in terms of long-term demand growth.
gas issue
Another hydrocarbon demanded by the world economy – natural gas – may also rise in price to record levels, analysts at Capital Economics warned. Experts believe that tensions in geopolitics risk provoking a growth spurt in the commodity market. Such an outcome is possible if sanctions are imposed on energy exports from Russia, and also if Moscow starts using gas supplies as leverage.
Earlier in January, Gazprom did not book the capacity of the Yamal-Europe gas pipeline for February for transit through Poland. The volume of 89.1 million cubic meters per day was offered at the auction. During trading on Tuesday, January 18, gas prices in Europe fell by $100 to $878 per thousand cubic meters. The highest ever gas price in Europe was recorded on December 21 – $2,190.4.
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