Oil prices lower again

/By Azernews/

By Fatma Babayeva

Oil prices experienced a decline in the global market three days in a row amid the increase in a number of oil rigs in the U.S..

July futures of WTI crude plummeted to $48.54 a barrel in NYMEX on June 13 [3:08 am], whilst Brent crude dipped to $50.09 a barrel in London ICE on the same day.

Price of Azeri Light crude which Azerbaijan sells through Turkish Ceyhan and Georgian Supsa and Batumi ports also recorded a decrease by standing at $50.97 a barrel on June 11.

Meanwhile, the average price for Urals (Ex-Novo) that Azerbaijan exports via Russian Novorossiysk port amounted to $47.64 per barrel last week.

Price of OPEC’s oil basket is also going down. It equaled to $47.05 on June 10, according to the official website of the organization.

The surge observed in the oil prices during the recent month was seen as temporary by some energy experts. Supply disruption in several major oil producing countries like Nigeria, Canada, Libya and Venezuela trimmed the oil glut in the global market for a while.

In April-May, the market sent signals of rebalancing. Nevertheless, prices around $50 a barrel brought a number of oil rigs back online in the U.S., which was expected to affect the overhang in the market in the second half of 2016.

Moreover, OPEC abandoned production ceiling by allowing its members to pump oil in the volume at will.

Additionally, it is a question of time when supply outages from above mentioned countries will return to the market.

The global economic growth, particularly in China is also gloomy. The demand growth does not look like to able to absorb the additional supply in the market.

Strengthening USD is also having a negative impact on the crude prices.

Brent price will average $44.27 a barrels this year and $55.6 a barrel - next year, according to the forecasts of different international organizations and companies.

The WTI price is expected to average $43.7 and $55.6 a barrel in 2016 and 2017 respectively.