Report: Oil prices unlikely to decline in the near future - ANALYSIS

Report: Oil prices unlikely to decline in the near future - ANALYSIS

Baku. 18 September. REPORT.AZ/ Oil prices have been stabilizing in the world markets this month.

Report's analytical group says that the Brent crude oil has not been below $75 a barrel since early month, $77 during last week.

Even after the American Petroleum Institute (API) issued a statement on reduction of daily output to 8.636 mln barrels during the past week on September 12, the oil price exceeded $80 per barrel. Similar situation was last recorded in May. However, as the daily output in the United States remained at 396.2 mln barrels, it hindered the prices from rising over $80 and oil prices began to drop again.

Though the drop in production is a signal of purchase for oil traders, the demand has not seen a sharp increase. Russian Energy Minister Alexander Novak stated earlier that if the market records deficit,  his country and other non-OPEC states will increase export. All these indicate that the oil price will not change drastically.

Nevertheless, the US is increasing pressure on Iran which affects the oil importing countries. One of those countries is India, which is planning to reduce oil purchases from Iran twice from 658,000 barrels to 360,000 -370,000 barrels daily. This is the initial stage of the US sanctions to be imposed on Iran via India in September and October and it will not allow oil prices to decline. In addition, the market prices tend to increase. That’s why the oil price will unlikely decline in the near future. 

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