Oil has gone down

The price of “black gold” dropped below $40

Oil prices fell below $40 per barrel on Friday. The market still does not believe that the global economic crisis will be overcome in the foreseeable future, and therefore assumes that the demand for energy resources will significantly decrease. Experts predict that next year the price of oil could reach $20 per barrel. Under these conditions, the Organization of Petroleum Exporting Countries intends to make a significant reduction in production : the head of the cartel, Shakib Khelil, said that an agreement on this has already been reached among the OPEC energy ministers and that on December 17 at the summit they will make a decision that will turn out to be a “surprise.” Apparently, experts believe, we are talking about a more significant reduction in production than by 2 million barrels per day, as was the case in October . In addition, Mr. Khelil called on the Russian leadership to reduce production.

Oil prices collapsed after labor market statistics were published in the United States - 533 thousand people were laid off in America this year, this is the highest figure since 1974. Traders viewed this information extremely negatively. As a result, the American benchmark WTI fell by more than $2.5 to $40.81 per barrel. On the London Stock Exchange, the closing price for Brent crude was $37.38 per barrel. Russian Urals was sold at $34.88 per barrel. Such prices on the oil market were recorded in December 2004.

As a result of falling oil prices, gasoline is sharply cheaper in the United States: the lowest retail price for fuel with an octane rating of 87 was recorded in the state of Illinois - $1.5 per gallon (39 cents, or 11 rubles per liter). In New York, a gallon of premium gasoline (starting with 92 octane fuel) costs about $2 (about 50 cents, or 14 rubles per liter). According to the AP agency, gasoline futures for delivery in January are already worth 90 cents per gallon (24 cents, or 6.65 rubles per liter). In Russia, a significant drop in fuel prices has not yet been recorded, since vertically integrated companies, as is known, have moved their profit centers to the sales sector.

"In the current economic climate, oil prices could fall to $20 to $30 a barrel," said Platts regional director David Ernsberger. After all, the decline in demand in the United States has now begun to exceed the growth in consumption of raw materials in China. The general director of the trade association Ray Barros Trading Group, Ray Barros, agreed with this forecast: in his opinion, the first quarter of 2009 will be accompanied by economic stagnation in the United States, aggravated by deflation. Mr. Barros recommends shortening positions in dollars and US government bonds, making long-term investments in gold and raw materials. At the same time, according to Western experts, a further drop in oil prices makes it attractive to invest in the electricity sector (for example, in China), which will benefit from a reduction in raw material costs with rising tariffs (in Russia, by the way, this is exactly what is happening). Analysts at the Chinese bank CNBC, in turn, believe that due to the development of nuclear power, the demand for uranium will increase.

Nevertheless, some analysts are not inclined to dramatize the situation. The likelihood that oil will cost $30 per barrel or lower is quite low, says Yulia Tseplyaeva, chief economist at Merrill Lynch for Russia and the CIS. “We are considering a scenario in which the price of oil will be at $30 per barrel next year, but we consider it unlikely,” Interfax quotes her. - The price of oil, of course, can touch this level - oil can do anything with us. Meanwhile, oil will not cost $30 for a long time, since a number of countries simply cannot afford to produce oil at such a price.” The forecast for the weighted average price of oil in 2009 from Merrill Lynch analysts is $47 per barrel. “If you think about it, $50 per barrel is not such a bad price for oil. By and large, nothing bad will happen in Russia in this case, if, of course, the state rescue plan works and a “hard landing” is avoided,” - said Ms. Tseplyaeva. “We are even more optimistic about 2010, when oil, according to our estimates, will cost $70 per barrel, which is very good.”

Nikolay GORELOV