21.07.2014 - The forecast on oil remains negative
The price dynamics of oil prices in the near future will depend on several factors. On the one hand, oil prices are supported by news from Iraq, where continues military confrontation of government troops and militants. Despite the fact that most of the oilfields and other objects of the oil infrastructure of Iraq are under government control, there is a risk of terrorist attacks that may lead to stoppage in the supply of the second largest supplier of oil among OPEC. Possibility of strengthening of sanctions against Russia from the EU and the U.S. can also lead to higher oil prices. On the other hand, Libya started to increase oil production and now produces about 550 thousand barrels per day compared to pre-war levels of about 1.3 million barrels. It should be noted that in Libya is also possible oil supply disruptions due to the instability of the situation. It is worth noting that negotiations on Iran's nuclear program is likely to lead to increase in oil exports to the world market, which will also lead to a decrease in oil prices.
Due to factors listed above, we maintain a long-term and medium-term negative outlook for the oil, to near $ 92 per barrel, but did not exclude the possibility of a sharp rise in prices in case of another deterioration in countries such as Iraq, Libya and Ukraine.