According to Bloomberg, on September 30 WTI oil futures dropped by 3.5% to $91.26 per barrel and Brent oil – by 2.8% to $94.48 per barrel.
This is a minimum WTI price during the past 17 months and the biggest decline of Brent in the past year, because of risk of suspension of deliveries from Near Est.
Oil prices have been going down for three months running, because of growth of deliveries. “The deliveries grow, but there is no demand,” said CMC Markets Plc analyst Michael Houson. We see a low economic growth, Europe and China reduce the pace of growth and the US air strikes at the positions of Islamists in Syria and Iraq protect the oil deliveries on the Near East. In September 2014 production by OPEC member-states increased. Libya was among the leaders and its production reached a year’s maximum level, according to the review released by Bloomberg on Tuesday. OPEC has not coordinated the reduction of oil production quotas yet, said Suheil Muhammad-al-Mazrui, UAE Energy Minister, at the conference in Abu-Dhabi on September 23, 2014. “This is not the decision, which could be made individually,” he said.
Against the background world oil price reduction Russian economy could face recession, believe the experts questioned by Bloomberg.
Reduction of oil price delivers a damage to the Russian economy, almost half of budget revenues fall to profit from oil and gas sales. This limits Russia’s ability to cope with the consequences of the sanctions imposed against the country depleting its financial resources, the experts say.
