Oil price broke through $80

The price of Brent crude oil for the first time since November 2014 exceeded $80. Over the past month, oil has risen in price by $8, and by next year, analysts predict an increase to $90-100.

Details

• By 12:45 pm, Brent futures for July rose to $80.12 per barrel. At the time of publication of the article, the price of a barrel fell to $79.94.
• The last time oil quotes exceeded $80 per barrel was in November 2014. Prices reached the bottom ($29 per barrel) in January 2016, and steady growth began in June 2017. In the last month, oil has been rising sharply against the backdrop of the US withdrawal from the nuclear deal with Iran and Donald Trump's statements about the imposition of sanctions against the country.

Context

• In early May, analysts at Bank of America Merrill Lynch for the first time allowed oil to return to $100 per barrel , substantiating this forecast with agreements to reduce production between Russia and OPEC, problems in the Venezuelan oil industry and the risk of lower exports from Iran.
• Yesterday, Morgan Stanley predicted an increase in the cost of crude oil to at least $90 per barrel due to new international requirements for marine fuel, which will ban the use of petroleum products with a high sulfur content.

What do I get from this?

The more expensive oil is, the more likely it is that the fulfillment of Vladimir Putin's election promises will be financed without additional pressure on business. At the end of April, against the backdrop of rising prices, the government discussed a change in the budget rule - the cut-off point for oil prices, starting from which revenues from oil exports are transferred not to the budget, but to the National Wealth Fund, says The Bell source. Now this point is $40, it was proposed to shift it to $43.

Peter Myronenko