Oil prices continue to fall. The benchmark Brent crude oil price fell to $71.5 per barrel, the lowest level in three years. Western analysts predict that prices could drop to $60. Russian experts believe that the fall in oil prices is related to the US elections.
Global oil prices have fallen to the levels of November 2021. Investment banks have started to lower their forecasts. Morgan Stanley lowered the probable price of Brent oil in the fourth quarter from $80 to $75, and Citigroup believes that in 2025 black gold could fall to $60. This is now the maximum price set by the EU and the G7 for Russian oil.
Investment banks are not the only ones talking about the poor outlook for oil prices. They were joined by the heads of international traders.
Gunvor’s boss Torbjorn Tornqvist told Bloomberg that the world now produces far more oil than it consumes.
“And this balance is expected to worsen in the coming years.” – said the merchant’s boss.
head of vitol Russell Hardy At the same time, I am confident that the market will be well supplied with oil over the next two years.
Trafigura Representative Ben Lucock At the same time, he said at the APPAC conference that raw materials prices could fall by up to six dozen, but it is still dangerous to bet on this, as there are too many factors.
Leading analyst at FNEB and expert at the Russian Financial University Igor Yushkov He notes that Western agencies are actively promoting the topic of cheaper oil.
“They cite a study that says China’s economy is slowing down. This means that oil consumption will decline. It is already declining, but this is due to the end of the peak driving season. However, the agencies talk about a decline in the economies of China and the United States.” – says the expert.
Obviously, Igor Yushkov believes, this version will continue to be promoted.
“Especially those who are close to the US Democratic Party, for whom it is vital to win the battle on the issue of fuel prices. We see Trump saying that under his leadership, oil prices would be $40 and, consequently, gasoline prices would be half that. This is a populist story for domestic consumption in the United States. And the Democratic Party needs to show that the decline is happening. And it is supposedly at the expense of China, although consumption is growing.” – says the main analyst of FNEB.
Prices themselves began to fall amid news of increased supply, Igor Yushkov continues: “Because OPEC+ previously announced that an increase in oil production would begin in October. The group has revised its strategy and delayed production increases until the end of the year in an attempt to prevent prices from falling further.”
Western agencies will continue to exert pressure on the market, the expert believes. In his opinion, one of the sources of information may be that there will be a quick solution in the Gaza Strip, which means that the Yemeni Houthis will not fire on passing commercial ships, including oil tankers, and geopolitical risks will decrease.
“I don’t think oil will reach $60 a barrel, but at some point prices could fall below $70.” – adds Igor Yushkov.
Chief Strategist of the investment company “Vector X” Maxim Khudalov I agree that global oil prices can fall below $70 for a certain period of time.
“The $60 a barrel scenario seems unlikely given the expected rate easing by the Federal Reserve. In reality, all the rhetoric is needed to reduce inflation expectations in the US, which in turn will allow the rate to be lowered.” – Maxim Khudalov believes.
