According to the observers working for The Times, this may well not be the end of the never-ending price decline in the glob oil market started in mid 2014. In other words, hey assume that crude oil may find the price bottom somewhere around $20 per barrel if the worst-case scenario manifests itself, Market Leader reports.
In particular, the observers do not predict lower prices for sure. They just do not deny the possibility of oil hitting $20/b in 2015. If this is the case, the price is going to return back to the 20-year low, Masterforex-V Academy reports.
If to consider the oil futures traded on NYMEX (USA), since the beginning of 2015, the total volume of put options on WTI oil futures for June delivery with $20/b as the strike price has already increased by 13 million barrels in absolute figures.
It should be noted, that on January 13th, Brent oil dropped down to $45,19 per barrel, thereby breaking the price low set 6 years ago during the global financial crisis. At the same time, WTI outpriced Brent for the first time since June 2013. Some analysts assume that this fact highlights the weakness of the European economy along with the possibility of easing the U.S. oil export ban introduced in the 1970s.
On January 12th, Goldman Sachs, one of the biggest players in the global commodity market, downgraded its forecast for global oil prices. In particular, the downgrade turned out to be considerable - by 20-30 dollars a barrel. The bank’s experts assume that the average price of Brent oil is going to be around $50.4/b in 2015. They also expect the price to go up to $70/b in 2016. The previous forecast was $83/b and $90/b respectively.
The average price of WTI oil is going to be $47.1/b and $65/b in 2015 and 2016 respectively. The previous forecast was $73,8/b and $80/b respectively.
At the same time, the oil experts working for Bank of America Merrill Lynch expect Brent oil to go down in value down to $40/b this year. With that said, they expect that the global oversupply will reach a certain point at which some exporters will have to cut down on their oil production. This is going to be either Saudi Arabia or non-OPEC exporters.
Meanwhile, the price of the OPEC’s oil basket is down to $42/b. It should be noted that the oil basket is one of the key indicators of the global oil market. This is the average price of the oil exported by all the OPEC members. Masterforex-V Academy reminds you that the bear market started from $115/b in summer 2014. The decline was triggered by excessive oil production coupled with lower demand coming from China and the EU amid the existing global economic slowdown.
Meanwhile, Russian politicians keep on believing in higher oil prices in the near future. In particular, the Russian Deputy Minister of Economic Development assumes that the price of crude oil is going to fluctuate in the $60-80/b range this year.
He says the Department is currently working on various plans demanding on alternative price scenarios based the price within the range between $40/b and $80/b. He also reiterates that the forecast are definitely going to be revised as the situation clarifies. Still, he is sure about one thing: The deeper the prices fall, the stronger and more likely the upward rebound is going to be.
He also says that once he price of oil goes down to $40/b and stays there for some time, the Russian economy is going to undergo structural changes. It should be noted that according to the department’s official forecast, if the price is going to stay around $80/b, the Russian economy will slow down by 0.8%. If there is $60/b, the drop will reach 3%.
