SBI Markets: oil prices not at bottom yet, may drop to $25/barrel
Baku, Azerbaijan, Sept. 7
By Aygun Badalova – Trend:
Oil prices have not reached their bottom yet, and Sam Barden, the director of SBI Markets, an international commodity trading and advisory company believes they can plunge to $25 per barrel.
Oil prices fell on Monday as concerns of global oversupply, a firmer dollar and lackluster U.S. nonfarm payroll data on Friday weighed on oil markets, Reuters reported.
Brent crude for October delivery fell 25 cents to $49.36 a barrel as of 0419 GMT (12:19 a.m. EDT), after ending the previous session down $1.07, or 2.1 percent. The European benchmark fell almost 1 percent last week. U.S. crude for October delivery – WTI, was down 22 cents at $45.83, after settling 70 cents down, or 1.5 percent, in the previous session.
“I do not think we have seen the low in oil prices this year,” Barden told Trend on September 7.
He said the physical oil market remains much oversupplied, and is running out of storage capacity.
“However, we also have the financial oil market, which has been largely responsible for the huge volatility in oil prices, and I think a lot of financial oil traders have lost a lot of money in recent weeks,” he said.
“A strong USD dollar is helping keep oil price slightly up, but I think the reality is we will still see oil price lows of $25, if not this year early next year,” Barden added.
Meanwhile, despite another eventful month in oil markets, Brent prices are broadly unchanged from early August levels, according to the report of the US JP Morgan bank, obtained by Trend.
The slide in Brent and WTI prices over the course of the second half of the month reversed dramatically with the biggest three-day rally in percentage terms in 25 years, the report said.
While part of the gains from the August lows of $42 per barrel and $38 per barrels for Brent and WTI, respectively, have been erased subsequently, bank’s analysts expect prices to continue to fall into quarter end.
Brent prices will average $54.50 per barrel and $52.50 per barrel for 2015 and 2016, respectively, according to the JP Morgan analysts’ forecasts.
WTI prices are expected to average $48.30 per barrel and $46.50 per barrel for 2015 and 2016, respectively.
Aygun Badalova is Trend Agency’s staff journalist, follow her on Twitter:@AygunBadalova
Follow us on Twitter @TRENDNewsAgency