Oil prices lower again
Oil prices experienced a decline in the global market four days in a row amid the increase in a number of oil rigs in the U.S..
Price of July contracts of WTI crude oil dipped by 1.43 percent to $48.18 a barrel in NYMEX on June 14 [7:56 am] while August futures of Brent benchmark crude experienced a decline by 1.47 percent to $49.61 a barrel in London ICE on the same day.
A barrel of Azeri Light crude cost $50.69 on June 14, which is $0.28 less compared to the previous day.
Meanwhile, the average price for Urals (Ex-Novo) that Azerbaijan exports via Russian Novorossiysk port amounted to $47.64 per barrel last week.
OPEC’s oil basket price is also plummeted to $46.25 a barrel on June 13.
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 and Libya trimmed the oil glut in the global market for a while.
In April-May, the market sent signals of rebalancing. The supply outages also offset the increasing oil exports from Iran.
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.
Reportedly Canada will soon restore production in oil sands. Nevertheless, the timeframe when political troubles in Libya and Nigeria will be eliminated is also questionable.
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. The Asian market is also demonstrating weakness.
Brent price is expected to 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.