Oil price may hit $40 per barrel by end of month18 march 2015, 17:12
Oil prices may once again plummet by the end of March, Tengrinews reports. This time to $44 per barrel, says analyst of Alpari Anna Kokoreva. She predicts that by the end of the month, Brent will fall to $44 per barrel, while WTI – to $40 per barrel. The analyst also noted that WTI was sliding faster than Brent.
"Oil prices continue falling amidst growing reserves. Prices on Brent crude oil are at the level of $53 per barrel, WTI has updated its local minimum by dropping to $43.2 per barrel. In our view, the current fall is not the limit," Kokoreva said.
As noted by the speaker, the March report of the International Energy Agency confirmed that commercial oil stocks in the OECD (Organization for Economic Cooperation and Development) grew in January by 23.1 million barrels - to 2.7 billion barrels. Surplus oil reserves in the US rose to a record 72 million barrels. Oil production in the OPEC countries last month was 30.2 million barrels per day, down by only 90,000 barrels.
It was reported that representatives of the largest oil companies in the US turned to Barack Obama urging him to lift the ban on export of energy and sell the surplus. But there has been no decision yet.
"They have registered a slight increase in the demand for oil in Saudi Arabia. However, the demand is growing much too slow and is not enough to bring the market into equilibrium. Today, the American Petroleum Institute will present data on oil reserves, accumulated in the repositories at the end of last week. Most likely, the statistics will once again show their growth, which will reinforce the fall of oil prices," Kokoreva said.
Should the prices continue falling, the Kazakh government might have to revise state budget once again. Kazakhstan relies primarily on export of raw materials, such as gas and oil, and the state budget of the country Isu under a lot of pressure from the falling oil prices. Previously, the Central Asian economy already changed its budget outlook using $50 per barrel as a benchmark.
Reporting by Azhar Ashirova, writing by Dinara Urazova, editing by Tatyana Kuzmina