Nervous speculators

Oil prices set new record due to Korean missile launch

Oil prices set a new record, reaching $75.4 per barrel at auction in New York. It took 2.5 months for quotes to overcome the previous maximum, which amounted to $75.17 per barrel. Experts are beginning to increasingly believe that fuel prices could rise to $100 per barrel. Another breakthrough in oil prices was made on the information that North Korea launched several ballistic missiles without prior warning. Concerns immediately arose in the market about the possible emergence of political and economic instability in Asia. Bidders are still worried about events surrounding the nuclear program of oil-producing Iran, as well as the ongoing unrest in Nigeria, which results in damage to the oil transportation and production infrastructure. In addition, in America, after the start of the active driving season, gasoline reserves decreased, while some refineries in the country reduced refining.

As Mikhail Perfilov, development director of the oil transportation company Fearnleys, notes, “the high cost of fuel does not lead to a decrease in its consumption, which is approaching its seasonal peak, and local refineries cannot cope with the load.” At the same time, he notes that the growing import of petroleum products contributes to an increase in freight rates on transatlantic routes. At the same time, according to US Department of Energy data published yesterday, gasoline reserves increased slightly last week - by 700 thousand barrels, to 213.1 million. However, oil reserves decreased by 2.4 million barrels, to 341.3 million “This is a normal level for the coming season, and this situation will continue until the end of August,” said Deborah White, senior energy analyst at Societe Generale, as quoted by Reuters. So there is no need to talk about a real shortage of oil and petroleum products yet.

“The price of oil still depends on speculators actively playing in the futures market,” notes Troika Dialog analyst Valery Nesterov. -- Recently, the normal cycle of oil price dynamics has been disrupted, which used to last three years, when prices first rose, then decreased, and then rose again. Now any reason is enough for quotes to jump, and sometimes the market reaction resembles real psychosis. When any tension arises, ordinary people start buying matches and salt in reserve. Speculators act according to the same logic.”

At the same time, according to Troika Dialog forecasts, from 2008 the average annual price of Russian Urals oil will be $38 per barrel. “Of course, this forecast can be adjusted, but in any case we believe that quotes will be lower than now,” says Mr. Nesterov. At the same time, he cannot exclude that in the event of significant geopolitical crises, prices will actually reach $100 per barrel. “A lot of people are starting to believe it,” agrees the analyst.

Against the backdrop of high energy prices on the eve of the G8 summit in St. Petersburg, foreign experts are beginning to talk about the imbalance of domestic and export prices for oil and gas in Russia. International Energy Agency Executive Director Claude Mandil has already said that “exorbitantly low domestic energy prices in Russia” are not conducive to investment in the oil and gas sector. “The normal functioning (of the Russian oil and gas market. - Ed. ) should be ensured, first of all, by the government by pursuing policies that promote investment, competition, energy efficiency and environmental protection through the development of new technologies,” ITAR-TASS quotes him.

Denis REBROV