Sign in to follow this  
Followers 0
Udara Hemachandra

Oil price should go down

Recommended Posts

Actually Oil price should go down because Russian Oil comes UAE and France will buy it so Russian Oil comes to market so oil price should go down 

Russian fuel oil exports to UAE's Fujairah set to spike in May. this is still taking place. so oil should go down 


Share this post

Link to post
Share on other sites

Well you are right. From today russian Kommersant



How much is a Russian barrel now The price of Urals rose in July, it is unknown how

According to Kommersant, the price of Urals oil in July could be much higher than previously thought. According to Argus, as of July 20, Urals' discount to Brent more than halved to $15 per barrel. Back in April, it exceeded $30 per barrel and has not been revised since then, since data on real transactions with Urals were not available. Other price agencies Platts and Reuters still estimate the discount in a fundamentally different way: at $30-40 per barrel. The closeness of the Urals market as a result of sanctions even more sharply raises the question of the representativeness of quotations, which are also used to calculate taxes.

The main grade of Russian oil Urals has risen sharply - the discount to the North Sea dated (Argus North Sea Dated) on July 20 fell to $15 per barrel from the previous $31-35 per barrel, follows from the data of the international agency Argus dated July 21 (a copy is available from Kommersant). ). Argus North Sea Dated is a benchmark for light North Sea oil, it includes the cost of Brent, Forties, Oseberg, Ekofisk and Troll grades.

Since the imposition of sanctions, Urals has been trading at a significant discount to Brent.

This was due to the fact that many European buyers refused Russian oil for reputational reasons, and others because of the difficulties caused by sanctions in settlements, ship insurance and increased freight rates. In April, the world's largest traders Trafigura and Vitol refused to buy oil from Rosneft and Gazprom Neft, which fell under blocking EU sanctions.

The cost of physical shipments of oil is usually determined by quotations from price agencies, of which the most authoritative are Platts, Argus and Reuters. They publish quotes on the appropriate bases (shipping points) based on open data, tender results, as well as closed surveys of participants in transactions (employees of the trading divisions of oil companies and independent traders). Although the representativeness of the quotes formed in this way has repeatedly raised questions from regulators (for example, the European Commission conducted an investigation in 2013-2015), this system has been operating for decades and is recognized by the market.

However, deals with Urals have become almost completely closed as a result of sanctions - tenders are no longer held, the spot market for this grade has disappeared, European traders are not involved in operations, and Russian companies hardly talk about the terms of selling their oil to Asia.

As a result, Urals quotes are formed on the basis of the latest known data on the size of the discount to Brent and change in accordance with the dynamics of Brent.

In the case of Argus, this latest data is from April 4, when the discount was fixed at $34.85/bbl for Rotterdam CIF basis and $31.9/bbl for Augusta CIF. “But more recently, demand for Urals has picked up in Europe as well, which likely helped boost Russian oil prices, and traders have started to share information again,” Argus said in a July 21 report. Argus declined to comment.

Oil refining in July may recover to last year's levels

According to Kommersant's data, on July 25 Reuters estimated the differential between Urals and Brent at $32.5 per barrel. As of July 21, Platts estimated the Urals discount to Brent on the European market at $40.76 per barrel.

Quotations from Argus are especially important, since they are used by the Ministry of Finance to calculate key taxes - MET, AIT, export duty. Information on the average price of Urals oil is published by the Ministry of Economy: for example, in June it was $90.2 per barrel. Russian oil companies complained in March that Argus quotes do not reflect the real discounts Urals is being sold at, and companies are overpaying taxes. The government discussed the transition to domestic indicators, but the Ministry of Finance has not yet supported this. At the same time, the head of the Central Bank of the Russian Federation, Elvira Nabiullina, said on July 22 that the regulator, together with the government, is working on an oil price index.



  • Like 1

Share this post

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

You are posting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  
Followers 0