BAKU, Azerbaijan, Feb. 6
By Leman Zeynalova - Trend:
The price of Azerbaijan’s Azeri LT CIF Augusta produced at the Azeri-Chirag-Deepwater Gunashli (ACG) field, increased by $4.23 on Feb. 4 compared to the previous price and amounted to $99.3 per barrel.
The price of Azeri LT FOB Ceyhan reached $98.39 per barrel, rising by $4.23 as compared to the previous price.
While speaking about the price growth factors, Deputy Head of PR and Events Department at the State Oil Company of Azerbaijan SOCAR Ibrahim Ahmadov told Trend that the price of Azeri Light oil depends on the market conditions and prices for grades of oil.
"In general, the recent rise in oil prices was stipulated by an increase in demand associated with the improvement of the epidemiological situation in the world and the revival of the global economy," Ahmadov added.
The deputy head of the department stressed that on the other hand, oil producers cannot rapidly increase production to that level that was before COVID-19 pandemic.
"While the recent rise in prices for energy resources is associated with the geopolitical risks, it is obvious that the rise in prices was observed even before the aggravation of the geopolitical situation in the world," Ahmadov said.
The deputy head of the department added that the main reason is the relatively slow growth in oil production and it is associated with a decrease in the amount of investments in the development and exploration of new fields in the recent years.
"When there is a decline in oil prices, investments are reduced, production level falls," Ahmadov said. "As a result, oil becomes a scarce commodity and its price rises again. After some time, when there is an excess of oil on the market, the described cycle will be observed again."
