Azerbaijan cuts oil price forecast for 2015

The Azerbaijani government has lowered the forecast of oil prices from $100 in 2014 to $90 per barrel for 2015, said the presentation of projects of state and consolidated budget of Azerbaijan for 2015, released by the Ministry of Finance of Azerbaijan.

The GDP value on the oil sector will be reduced by 2.2 percent in 2014, while the production of value added in the non-oil sector will increase by 8.1 percent compared to the current year and is expected to reach 39.5 billion AZN, according to the forecasts.

The official exchange rate for October 14 is 0, 7843 AZN / USD.

The share of oil sector in GDP for 2015 is predicted at 34.9 percent versus 40.4 percent in 2014.

It is expected that the share of the oil sector in general revenues will fall till 65.3 percent in 2015, compared to the forecast for 2014, where the level is expected to be at 66 percent. In 2013, the figure stood at 73.1 percent.

“One of the factors influencing the decline in oil prices on the world market, is that the US increased the production of hydrocarbons (11.5 million barrels per day), and reduced the volume of oil import since the beginning of the year,” the document said. “Since last year, the US stopped the import of natural gas, and now tries to reduce the supply of oil.”

In addition, it is noted that the weak development of the economy of the EU countries led to decrease in demand for oil in the region.

Currently, energy export increased in the direction of East Asia countries (China, India). However, economic growth fell below predicted forecasts for the last period in these countries, which is also one of the factors influencing the decline in oil prices.

"At the same time, geopolitical instability in the Middle East and a number of countries involved in the production of oil, as well as the lifting of sanctions against Iran are the reasons that oil prices remain at a high level, but the gradual stabilization of these processes will affect the decline in oil prices," the presentation said.

/Trend/