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Price of WTI crude will exceed Brent - FORECAST

Decline in production of Texas oil leads to a rise in price of raw materials

Baku. 8 September. REPORT.AZ/ Price of petroleum of WTI (Texas oil) in recent months, close to the cost of Brent crude oil and today the difference is 3.4 dollars per barrel (in favor of Brent). Although to the end of 2011 the difference was 27-30 dollars in favor of Brent.

According to analyst group of Report, prices of major world oil - Brent and WTI are determined depending on the reduction or increase in production in the regions where they are produced.Texas oil corresponds to the US, Brent crude oil - European standards.

In recent years, rapid decrease of the number of wells of shale oil in US leads to a reduction in oil production in the region.The reason for reduction of the number of wells is a deliberate policy of OPEC to reduce prices. As a result US companies go bankrupt because of the unprofitability of the development of oil shale deposits.

The extraction of shale oil requires more investment.The decline in oil prices contributes to reduction of number of these companies.This, in turn, will increase cost of Texas oil.

"On the other hand, oil production growth continues in countries where Brent crude oil is extracted.

OPEC and Russia are not going to reduce production.Taking into account the increase in production from the lifting sanctions against Iran, it is projected to decrease prices for Brent crude oil due to excess of supply over demand",-analysts stress.

Report experts believe that in next 1-2 months, Texas oil will be sold more expensive than Brent.This difference in coming years may rise to 10-15 dollars / barrel (in favor of WTI): "The difference more than this not expected, otherwise the question of Brent crude oil exports to the United States may arise on the agenda".

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