HomeMediaLatest NewsA surge in the oil market - Brent nears $100

A surge in the oil market - Brent nears $100

28 September 2023

Belogoryev Alexey M. Research and Development Director, Director of the Center for Energy strategic analysis and forecasting

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to Finam.ru on the world oil prices dynamics.

"The main reason for the rise in oil prices still lies on the surface - it is a reduction in the supply of OPEC +, first of all, an additional compression of exports and production in Saudi Arabia and Russia. Without this factor, prices for marker grades would probably quickly return to the $70-80 per barrel corridor with a general prospect of a smooth decline. Short-term support for high prices is also provided by improved estimates of global demand (the September consensus is +2.1 million barrels per day in 2023) and relatively low commercial oil reserves in the United States (416-420 million barrels), which, although they remain within the long-term average values, are closer to their lower limit," he said.

"Do not forget about the impact of financial factors: oil prices remain dependent on the dollar exchange rate and the cost of capital," Belogoryev adds, hinting that the level of $ 100 per barrel is unlikely to reach monthly and even more quarterly values. "I doubt it. In 2024, if the market does not face new restrictions, prices should go down. Fundamentally, their current level is overestimated. The expected slowdown in demand growth, a decrease in OPEC+ maneuver space and possible the US deals with Iran and Venezuela to ease sanctions may still affect the market quite strongly next year (we see tacit easing in 2023)," the expert stressed.

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