MOSCOW, 3 Sep — PRIME. Next week, oil prices are expected to remain within $90-105 per barrel of Brent, Alexander Bakhtin, an investment strategist at BCS Mir Investments, told Prime.
According to the expert, the influence of multidirectional factors is unlikely to allow black gold quotes to go far from the designated zone.
Bakhtin noted that volatility in global risk appetite, a strong dollar and possible progress towards a new Iranian nuclear deal will continue to keep prices in check.
“Demand for risky assets, including raw materials, is declining due to fears of a recession in the US and the EU, which are increasingly supported by weak macro statistics, new COVID restrictions in China (this time in the metropolis of Chengdu), as well as the prospects for tightening monetary policy by the world central banks in the face of raging inflation,” the expert explained.
In particular, the ECB meeting will be held on September 8, following which the key rate may be increased by 0.5-0.75 percentage points, up to 1-1.25 percentage points. We also note the passage of the peak of the automobile season in the United States.
The expert added that the coordinated policy of the OPEC + member countries, extremely high gas prices (provoking an increase in demand for fuel oil and diesel), political tension in Libya, the threat of interruptions in supplies from the Russian Federation amid sanctions initiatives, including ideas G7 countries on the introduction of a “ceiling” on prices for Russian oil.
Bakhtin stressed that the meeting of the OPEC+ Ministerial Monitoring Committee on September 5 will be an important event for the market.
“The likelihood of a decision to cut production is low, given the fact that there is still no clarity on the fate of the US-Iran nuclear deal. An agreement on an above-plan increase in production is also unlikely in the current situation. Current price levels are generally comfortable for key oil producers,” the expert said.
It is also worth noting the approach of the hurricane season over the Gulf of Mexico, during this period of the year, bad weather often temporarily paralyzes part of the American oil-producing infrastructure both in the Gulf itself and in the southern states. And this locally shifts prices up.
“Therefore, in the near future we will be monitoring not only market indicators, but also weather reports from the United States,” Bakhtin summed up.