BNP and UBS warned about the drop in oil prices to $30 per barrel

Bloomberg, the representatives of Commerzbank, BNP Paribas and UBS Group announced that, in their opinion, the rise in oil prices by 70% in comparison with January lows reminiscent of what was happening on the market last year. Then a barrel of Brent rose in the spring to $68 per barrel, but in may, this trend has exhausted itself. According to experts BNP and UBS, in the coming weeks, prices may return to around $30 per barrel.

“There are dangerous Parallels with the year 2015. The market is already overheated and a correction is long overdue,” – said the Agency representative of the Commerzbank’s Eugene Weinberg.

Bloomberg indicates that the price growth was influenced by the unstable situation in Nigeria, Iraq and Kuwait, where there was a strike of workers of oil industry. Moreover, the situation has not affected including the failure of the Doha negotiations, where the OPEC countries and the largest producers are not able to agree about freezing of the level of production at the January level.

However, experts point to the factor of shale oil. “Rising prices can be self-destructive, because it inspires the producers of shale oil in the United States,” says Harry Chilingirian from BNP Paribas. The French Bank believes that the preservation of oil prices at a low level could crush the American manufacturers.

“Strengthening of oil prices – the path on thin ice,” agreed UBS analyst Giovanni Taunovo.