Main article: Oil and gas production
2024
5% price jump to $75 a barrel after Iran's missile attack on Israel
Urals price in April above prices in April 2023 and 2022
2023
OPEC + deal brought Russia an additional $300 billion
"The OPEC + deal to reduce oil production, in which Russia is participating, has already brought an additional 30 trillion rubles to the Russian budget. This is more than $300 billion of our assets, which were frozen abroad. This is the result of trusting cooperation between Russia and Saudi Arabia and other OPEC + countries, "said RDIF head Kirill Dmitriev in December 2023.
Oil price dynamics since 1990. Schedule
In 2023, oil consumption reached record levels and increased by 2.3 million barrels per day.
In the Indian market, Russia and Iraq sell oil at a close price
Urals price decline below $60 per barrel due to overall decline in oil prices
The fall in oil markets led to the fact that in early December 2023 the price of the main Russian Urals oil fell for the first time since July below the G7 limit of $60 per barrel.
Opaque group of algorithmic money managers increasingly affects oil prices
The dynamics of the oil market is determined by a destructive group of bot traders. An opaque group of algorithmic money managers is increasingly affecting oil quotes by November 2023.
What is happening cannot be fully explained by the actions of OPEC or the war between Hamas and Israel. While supply and demand fundamentals still dictate overall commodity price cycles, day-to-day trading of crude oil futures is increasingly dominated by speculative forces, fueling volatility and leading to a gap between the physical and paper markets.
And it's not just speculators in general - traders point the finger at an opaque group of algorithmic money managers known as Commodity Trading Advisory (CTA), they have become a powerful force in the oil market.
Urals price drops to $60 per barrel
The fall in oil prices led to the fact that the cost of the leading Russian crude Urals by the end of October 2023 returned to the range of $60.
Urals price rises above $85 per barrel
By September 2023, Russian companies are successfully bypassing restrictions that the United States and its satellites have tried to impose, which allows exporters to sell more oil at prices close to international ones.
Russian oil continues to rise, defying the illegal "price cap" imposed by the G7 and its allies. Oil from the country's western ports is rising along with futures at the end of September, according to Argus Media Ltd. The main Russian variety Urals is traded at a price of $85.35 per barrel in Primorsk and $86 in Novorossiysk.
In order not to fall under sanctions, European insurers and shipowners must receive paper confirming that the cargo was bought at a price below $60 per barrel. Most of them rarely have a real idea of the cost of cargo, so many continue to provide services, despite the current level of prices.
Urals price approaches $60 per barrel in the port of Novorossiysk
In July 2023, the price of Russian oil in the port of Novorossiysk is closest to the "price limit" established by the G7 countries since the entry into force of these measures at the end of 2022. The price of Urals is approaching $60 per barrel.
Urals price rise to $58.63 per barrel
The average price of Urals oil, the main Russian export oil brand, in April 2023 increased by 22.5% compared to March - to $58.63 per barrel, and in annual terms - decreased 1.2 times, follows from the message of the Ministry of Finance of the Russian Federation.
Japan asked the United States for permission to buy oil in Russia more expensive than $60 per barrel
Japan buys Russian oil at prices above the $60 per barrel limit.
By April 2023, Japan persuaded the United States to agree to an exception, saying that it needed it to ensure access to Russian energy resources. The concession shows Japan's dependence on Russia for fossil fuel supplies, which analysts say has contributed to Tokyo's hesitation to more fully support Ukraine in its conflict with Russia. Japan has also increased purchases of Russian natural gas over the past year.
Asia shrugs off US-imposed "price caps"
According to a group of researchers who analyzed official foreign data to trade Russia and information on sea transportation, in the first quarter of 2023, there Asia were most likely "large-scale violations of the oil price limit," which USA their allies tried to impose. In the first quarter of 2023, the average price in the ports of the Pacific region was $73.14 per barrel.
The price of Urals in India is minus $18/bbl. to benchmark Brent
Platts has launched a new Urals quote with a price in India. Platts' quotation takes into account the price of oil, cargo insurance and freight, which makes it "more representative" than the current benchmarks for Russian oil of the price agency Argus. Two sources familiar with the traders' data clarify that as of February 1, 2023, it was minus $18/barrel. to benchmark Brent.
Urals oil price in January $49.48
The price of Urals oil in January 2023 was $49.48 per barrel. This is 1.7 times less than in January 2022, when the average price was $85.64 per barrel - the Ministry of Finance of the Russian Federation.
Urals grade trades at $38 per barrel
Russia's top oil is trading at twice the price of world prices - and well below the limit set by the G7 - following the imposition of sanctions targeting the Kremlin's oil revenues.
Urals oil on January 6, 2023 traded at a price of about $38 per barrel. The global benchmark for Brent crude was worth $78.57 on the same day.
2022
Lower prices for Russian Urals to $52 per barrel before the alleged introduction of price restrictions by the EU
In November 2022, the price of Russia's flagship Urals oil falls lower and lower.
According to Argus Media Ltd., the publisher of data on prices for physical goods, the country's key oil grade Urals fell by November 28 to $51.96 per barrel in the port of Primorsk on the Baltic Sea. The price in Novorossiysk fell by the same amount and to the same level.
Russian Urals oil is trading below the price ceiling set by Western countries, the Russian Ministry of Finance said.
In December 2022, the average price of Urals fell by 24% compared to the previous month and developed in the amount of $50.47 per barrel. The price ceiling set by Western countries is $60 per barrel.
According to the Ministry of Finance, the average price of Urals oil in January - December 2022 was $76.09 per barrel, while in the same period in 2021 - $69 per barrel.
Discount for oil buyers from Russia decreased from $34/bbl to $19/bbl
The average discount of the Russian Urals oil grade in relation to Brent decreased from $34/bbl. in April-May 2022 to $19/bbl. in August.
Rise in prices to $139 per barrel
On March 7, 2022, amid a special operation by Russia the Armed To Ukraine Forces on oil, it soared, briefly reaching $139 per barrel, which was the dramatic start of another turbulent week after the authorities USA said they were discussing the possibility of imposing an embargo on Russian supplies, fueling fears in a turbulent market.
While traders, shippers, insurers and banks are increasingly wary of taking on or financing purchases of Russian barrels, a formal embargo would have added to the uncertainty that has seen Brent trade in the largest range since the futures contract launched in 1998.
2021: Price rise to $84 a barrel
In October 2021, the price of Brent oil on the ICE exchange exceeded $84 per barrel for the first time since October 2018.
2020
Collapse of prices for Brent and Urals during the COVID-19 epidemic
The crisis during the COVID-19 epidemic by the end of April 2020 has already become the "leader" among all crises.
The cost of WTI oil fell below $0 for the first time in history
In April 2020, the price of WTI crude oil fell to an 18-year low to $18.03 per barrel.
Later on April 20, 2020, at the New York Mercantile Exchange (NYMEX), the cost of May futures for North American WTI crude oil first fell to $0 per barrel, and then its quotes went into negative territory, which has never happened.
The negative cost of oil reached - $40 per barrel. Thus , contract sellers paid extra to buyers. The collapse amounted to more than 300%.
At the same time, the collapse of quotations slightly affected oil companies, since they sell the vast majority of the extracted raw materials through long-term contracts, and sell the rest in advance using futures, not bringing to extreme situations like the one that happened on April 20, 2020. All losses were borne by speculators trying to make money on the quick resale of contracts and hoping for future price increases.
 | The simplest explanation for negative oil prices is that players are now paying "buyers" to take the oil when the oil storage facilities are full to the end, said oil market analyst Louise Dickson. |  |
American financier Jose Carabayo linked the oil collapse with the expectation of demand reduction markets in May 2020. Due to the fact that they trade futures contracts, they are preparing for this in advance, he said.
The COVID-19 coronavirus pandemic has reduced demand for raw materials, oil storage facilities are operating at maximum load, said Rainer Michael Price, Investment Director of The Global CIO Office. According to him, oil suppliers added problems and a warm winter in many countries, which further reduced the demand for raw materials.
The President USA Donald Trump called the situation with WTI a short-term phenomenon caused by financial pressure. He also said that oil prices will fully fill the country's reserves.[1]
The minimum price for WTI grade on the spot market was recorded on April 24, 2020.
2019: Urals brand average price for 19 years. Schedule
2015
2014: Price exceeds $110 per barrel
In 2014, oil prices exceeded $110 per barrel.
2011: Urals prices rise to $109 per barrel
Since the beginning of 2011, the cost of oil has remained at a comfortable level for all - in the region of $70-80 per barrel. However, then its rise to higher levels was recorded, and, according to the results of January-December 2011, the average cost of Russian Urals oil amounted to $109.3 per barrel, which is 39.8% higher than the average level of 2010. In December 2011 The price per barrel of Urals was 20.2% higher than in December 2010.
The first bells were the revolutionary events of the Arab Spring and the war in Libya, which, in addition to numerous casualties, forced oil quotes to grow. At the same time, an earthquake occurred in Japan, destroying the Fukushima nuclear power plant and leading to an environmental catastrophe, which called into question the development of the most promising alternative energy source to date, an atom. As a result, oil prices jumped once again and have already gone through the roof to $120 per barrel.
At this time, many experts started talking about the temporality of this phenomenon and the upcoming collapse of quotations. However, the occupation of Libya and the subsidence of the news background around the Fukushima nuclear power plant only slightly shook the cost of a barrel, while leaving it above $100.
Following oil prices, gas quotes also reached. Already in mid-2011. Gazprom head A. Miller predicted an increase in the cost of "blue fuel" to $500 per thousand cubic meters. m. Intuition practically did not deceive the gas "general" - at the end of 2011, according to the Ministry of Economic Development, the average contract prices for Russian natural gas in December 2011. amounted to $436 thousand cubic meters. m compared to December 2010. the price increased by 38.7%. In general, average contract prices for Russian natural gas, according to the International Monetary Fund (IMF), at the German border in 2011. have risen in price relative to 2010. by 28.9%, amounting to $381.5 per thousand cubic meters. m.
Geopolitical factors did not allow oil prices to decline in early 2012. In particular, the prospect of imposing sanctions against Iran and Syria allowed experts to predict an increase in "black gold" quotations to 150, and even $200 per barrel. The cost of oil will also affect the price of gas tied to oil prices.
For Russia, the increase in the cost of energy resources is that manna is heavenly, because more than half of the Russian budget depends on the revenues of the oil and gas industry. And to the budget of 2012. the price of "black gold" has already been laid at the level of $100 per barrel, while in 2011 the budget was initially drawn up based on the cost of oil at the level of $70-80 per barrel.
Difference in prices for WTI and Brent
According to the US Energy Information Administration (EIA), on September 22, 2011, the "spread" (price difference) between WTI and Brent amounted to a record $29.70 per barrel in favor of the European mixture. By the beginning of July 2013, the gap had narrowed to only two dollars, and during several trading sessions in the middle of the month, WTI even became briefly more expensive than Brent.
Infographics: EIA
The fundamental upheaval in the oil market can be explained by a number of factors, both local and fundamental. The first, first of all, is the achievement by 2010 of the maximum WTI production capacity and the beginning of the reconstruction of oil terminals in Cushing, Oklahoma (Cushing is the main center for the delivery of WTI mixture to consumers). Logistics difficulties had a decisive short-term impact on refiners, which chose to refocus on Brent, thereby spurring demand and prices for it.
However, the temporary difficulties with the transportation of the WTI mixture turn out to be a minor circumstance compared to the restructuring of the US oil and gas industry. We are talking about the "shale revolution" that began in the mid-2000s. For the period from 2000 to 2010, according to the American authorities, the share of shale gas in relation to fuel obtained by the traditional way increased in the country from 1 percent to more than 20 percent. The "shale revolution" made it possible to significantly reduce the cost of fuel production and begin to produce high-quality light oil from fields that were previously considered unsuitable for this. The most striking example is the Bakken field in North Dakota, which produces up to 750 thousand barrels of liquid hydrocarbons per day, which is comparable to the capacities of an export giant such as Qatar.
The appearance on the US market of a fundamentally new and affordable type of oil could not but lead to a decrease in WTI prices. However, the "shale revolution" indirectly influenced world production as a whole: the United States ceased to need large volumes of imports, and oil from its former trading partners poured to other consumers, primarily to Europe. From June 2010 to May 2013, purchases of foreign oil from the United States decreased by 2.3 million barrels per day. By comparison, the United States imports up to 7 million barrels of oil per day in total.
Brent pricing has problems of a completely different kind. On the one hand, in the main consumer of Brent, Europe, a recession continues, which leads to a decrease in the need for fuel, and therefore prevents prices from rising. In April of this year, Bloomberg reported that the International Energy Agency predicted a drop in oil consumption in developed European countries to 1985 levels.
On the other hand, Brent oil is becoming smaller on the market, as North Sea reserves are declining, and most fields have already passed maximum production levels. According to British authorities, North Sea production peaked in 1999, when the United Kingdom recovered 4.5 million barrels of Brent mix daily. In 2012, only 1.55 million barrels were produced daily. The potential future disruption or lack of European oil mix could lead to a strange market situation in which the leader for calculating the value of contracts can simply physically cease to exist.
And yet, European traders managed to make it so that quotes on Brent on the world market are more important than on WTI. The Telegraph, citing experts from the reputable research agency Platts, noted that in 2010 up to 70 percent of the world's oil was sold in relation to the cost of the European brand, and since then this ratio has hardly changed much. In December 2012, Brent won an important symbolic victory in the homeland of WTI - the US Energy Information Administration (EIA) for forecasts for the fuel market began to use the indicators of the European mixture, not WTI, in its calculations. Freezing the "spread"
Analysts interviewed by world news agencies agree that at the end of 2013 and throughout 2014, Brent will trade more expensive than WTI. However, they differ in their assessment of the "spread." Bloomberg on July 23, 2013 cited data from the investment bank Goldman Sachs, which predicts next year a European mixture of $8-9 over an American competitor. The financial institution believes that in the near future oil refining on the Gulf Coast will be reoriented to light shale oil, which will reduce the needs for WTI.
Deutsche Bank in early July 2013 announced that it assumes a "spread" in 2013 of $10, and by 2016 it will grow to $15. The US Energy Information Administration predicts an average difference in value between the two brands of $11 per barrel in favor of Brent in the second half of 2013. It was expected that in 2014, Brent's advantage over WTI should be reduced to $8 per barrel.
Urals blend prices
For Russian oil workers, it is more profitable for Brent to trade more expensive than WTI, since the prices for the domestic mixture of the Urals brand depend precisely on the quotes for Brent. All in the same "ideal" situation, Urals, based on its quality characteristics, should cost a little cheaper than the European mixture, however, the trend that traders pay less attention to the quality of oil has influenced Urals quotes. Recently, several times (for example, in December 2011 or July 2012), a spread between Urals and Brent in favor of the former was recorded on the exchanges. In the second of two cases, political events reflected on the mood of traders - on July 1, an embargo was imposed on the supply of Iranian oil, which coincided with temporary interruptions in supplies from the North Sea. Sanctions on Iran immediately increased demand for Urals, which is not very different in composition from Iranian oil.
Russian manufacturers can also influence Urals pricing. The Financial Times wrote that against the background of a reduction in oil exports from Russia to Europe to a ten-year minimum, traders were ready to pay more for Urals than for Brent, since many gasoline producers invested in modernizing factories in order to accept Russian oil, and are now forced to stand idle due to a shortage of hydrocarbons in the market.
The relationship between Brent and Urals once again testifies to the complex and not always obvious pricing mechanism in the oil market. Countries deprived of the ability to directly influence this mechanism have no choice but to experiment with supply volumes. The emergence of a new "benchmark" in Russia or in Middle Eastern countries is still unlikely due to the fact that they do not have a developed exchange market, and without it it is impossible to set market prices. At the same time, neither the United States nor Europe is ready to give up leadership in commodity trade, so traders will have to continue to monitor the two mixtures. And, of course, play on the difference between Brent and WTI.
Notes
| The site content is translated by machine translation software powered by PROMT. The machine-translated articles are not always perfect and may contain errors in vocabulary, syntax or grammar. Read original article If you find inaccuracies or errors in the results of machine translation, please write to editor@tadviser.ru. We will make every effort to correct them as soon as possible. |