Oil workers urged the world to prepare for lower prices in 2016

Oil workers urged the world to prepare for lower prices in 2016

Moscow. December 11. Oil prices in 2016, the average can be below the levels of the current year, analysts and oil industry representatives. Just six months ago the forecast was unimaginable, notes The Wall Street Journal.

In March of this year ten experts who participated in the survey publication, expected for WTI in the fourth quarter will be $50 per barrel or above. However, on Friday, the contract traded in electronic trading on the new York Mercantile exchange (NYMEX) in the neighborhood of $36,67 per barrel.

The current period of falling oil prices is one of the longest in history, and signs of its end not yet in sight, the article notes. Last time quotes at the close of trading was above $50 a barrel in July. Analysts say that they forgot that the market decline due to a glut of supplies can last a long time.

“For the last time there were not so many drops in oil prices because of parapotamos, – said the managing Director of Quintium Advisors LLC. – I don’t think the world was ready for this”.

In her view, unlike the recession in 2009, which was due to reduced demand and after which the market recovered for several months, the current downward trend can last for years.

The office of information energy (EIA) of the U.S. Department of energy, which publishes monthly forecasts for oil prices, now expects next year WTI will average $50,89 per barrel versus the January estimate to $71 per barrel.

“Many of us, including me, in the beginning of the year thought it would be a more rapid correction of supplies than was actually – said a senior analyst at global markets Wells Fargo Investment Institute, Paul Christopher. – Being punished for exceeding expectations, now we do not expect a price recovery will occur in 2016”.

According to him, WTI oil will trade between $45-55 per barrel next year.

Citigroup analysts give a forecast for 2015 and 2016 at $48 per barrel. Quotes of Brent crude, according to them, next year will fall to $53 per barrel from $51 per barrel by the end of this year.

Bank of America Merrill Lynch expect declines in 2016 compared with this year.

A week ago the WSJ published the results of a survey of eleven investment banks, according to which the price of oil will remain below $60 per barrel the main part of 2016. Analysts expect, on average, Brent crude will cost next year $57 per barrel, WTI to $53 per barrel.

The market is increasingly ubiraetsya that the situation with excess supply to the world market and will remain a significant part of next year that will continue to put pressure on prices. As a result, experts predict that Brent will not be able to overcome the level of $60 per barrel before the fourth quarter of 2016, while WTI will reach this level only in 2017.

On average in 2017 Brent will cost $67 per barrel and WTI – $64 per barrel, respondents believe the WSJ.

The Ministry of Finance of the Russian Federation believe that in the next 7 years will fluctuate in the range of $40 to$60 per barrel. “According to our estimations, expect some serious growth in oil prices – above $50 – not necessary. The oil industry is changing structurally. It may well be that so much oil is, in principle, already do not need the global economy. We will live in another reality and under different conditions”, – said Friday the Deputy Minister of Finance Maxim Oreshkin.

“So our next prediction is we see a fork from $40 to $60 per barrel for the next seven years. From these evaluations and we should proceed in conducting macroeconomic policy,” he added.