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Brent oil price below $37, first time in 7 years, WTI below $35, first time since 2009

December 14, 2015, 15:10 UTC+3 LONDON

Oil prices have accelerated the fall after the meeting of OPEC held on December 4

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© Ruslan Shamukov/TASS

LONDON, December 14. /TASS/. Brent oil futures prices with supply in January 2016 drop 2% during the trading session on the London’s ICE on Monday to $36.98 a barrel, breaking the level of $37 per barrel for the first time from December 2008.

WTI futures prices with supply in January 2016 fall 1.5% on the ICE to $34.94 a barrel breaking the mark of $35 per barrel for the first time from February 2009.

Oil prices have accelerated the fall after the meeting of OPEC held on December 4.

At the end of the 168th meeting in Vienna, the oil ministers of OPEC countries did not take any clear decision on oil production quotas because of the position of the countries, which are non-members of the organization.

Currently, the volume of oil production by OPEC members is estimated at 31-32 million barrels/day. Previous quota stood at 30 million barrels/ day.

The Russian ruble is depreciating against the background of the falling oil. On Monday, the dollar rose to 70.73 rubles, which is by 37 kopecks higher than the results of the previous closing session.

The euro raised by 15 kopecks to 77.55 rubles.

Meanwhile the US Congress is continuing to work on harmonization of the financial budget in 2016, Albert Koroev, expert with BCS Express said.

"The Senate and the House of Representatives voted in the second half of the last week for a provisional budget, which will fund the government until 16 December. Wall Street Journal reported that under the new budget, by Wednesday, the Congress can adopt a package of bills containing the provision on lifting the embargo on the supply of crude oil abroad. Previously, the presidential administration threatened to veto such an initiative, but the sources say that the White House may be willing to compromise. In this regard, it is worth noting that the spread between the oil of WTI and Brent has narrowed since September, whereas previously, the vibration amplitude was quite high and the value itself was very significant,"- the expert said.

The difference in the cost of Brent crude and WTI crude has been declining since February. Then WTI was cheaper than Brent by $8, but now the difference is slightly more than $2.

In addition, the lifting of sanctions against Iran and the country’s preparations to enter the global oil market also put pressure on the oil quotations.

"It is a high probability that a drop in prices of oil will continue this week. As Iran’s Deputy Oil Minister said on the weekend, the sanctions against Iran will be completely removed at the end of December or in the first week of January. The probability that Iran will defer the increase in oil exports because of low prices, is equal to zero,"- Vasily Tanurkov, the analyst at the Veles Capital said.

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