The price of oil is important to Russians. After all, oil revenues are decisive for budgeting. Also, the price of oil affects the cost of gasoline and diesel fuel.
Factors Affecting Oil Prices
Like any other commodity, the price of oil is determined by the relationship between supply and demand. When the demand for oil rises, prices begin to move upwards, while falling, on the contrary, prices begin to fall.
Thus, one of the key factors affecting the price of oil is the state of the world economy. In the pre-crisis period, oil prices exceeded $ 140 per barrel. (the value of the OPEC oil basket is indicated), while in 2009 it showed a sharp decline to $ 45 per barrel.
Key oil consumers are the US and the EU, which are gradually catching up with developing countries (China, India). The not encouraging statistics of industrial production in these countries in recent years have led to the fact that the price of oil has a tendency to decline.
On the other hand, the oil price is influenced by the volume of production. The weakening of sanctions against Iran, the possible stabilization of the situation in Syria and Libya should lead to a drop in oil prices. Meanwhile, political risks and a difficult international situation (including due to the situation in Ukraine) will support oil prices.
Another factor that may affect the price of black gold is the emergence of alternative technologies. For example, a gradual replacement of oil with shale oil (similar to gas) is expected. But for now, this is a matter of a separate perspective, since the technology has not yet been finalized for a full-scale market launch.
Oil price forecasts
Leading experts in the majority make negative forecasts for oil prices in 2014. Thus, the World Bank predicts a negative trend of 1%. It is expected that the average oil price in 2014 will be $ 103.5 / bbl. The forecast is based on a drop in oil demand in developing countries - China, India.
Other experts are making even more pessimistic forecasts. And it is believed that with the normalization of the situation in Libya, the price of oil may roll back to the level of 70-80 dollars per barrel. This is exactly what it was before the outbreak of hostilities. It should be noted that in the Russian budget the oil price is set at $ 94 per barrel. in 2014 and $ 95 / bbl. in 2015-2016. Thus, if this forecast comes true, it will have an extremely negative impact on the state of the Russian economy.
Russian forecasts are more optimistic and assume an average oil price in 2014 of $ 117 / bbl.
So far, negative forecasts have not come true. The Iraqi crisis has led to the fact that the Brent mark in July cost 112, 64 dollars per barrel. and increased from 107.65 dollars per barrel. Its price is expected to be relatively stable in August and remain in the corridor of USD 108-114 per barrel.
