Lukoil: Oil Has $80 Ceiling for 3 to 7 Years

by Ship & Bunker News Team
Monday June 1, 2015

LUKOIL (Lukoil) says that it is unlikely that oil will cost more than $80 a barrel any time soon, Forbes reports.

"Oil prices in the coming years are unlikely to exceed $75 to $80 for three to seven years," Vagit Alekperov, CEO of Lukoil was reported to have said on Thursday.

Given that IFO380 bunkers are typically priced at between 70 and 75 percent of crude, the prediction would put a ceiling on bunker prices of around  $450 per metric tonne for the period.

In the context of such oil prices, Forbes says that oil companies will have to reconsider their capital expenditures.

Lukoil, one of Russia's biggest energy companies, has already begun feeling the effects of such prices, ending the fourth quarter of 2014 with profit margins of -3.4 percent.

With Brent crude futures as high as $72 for as far as three years out, and nearby contracts sitting at just $63, the Russian government has already reportedly overhauled its federal budget to assume oil prices of $60 a barrel, rather than the $100 a barrel that was previously assumed.

At the beginning of May, LUKOIL-BUNKER LLC (Lukoil-Bunker LLC), a subsidiary of LUKOIL, announced that it has resumed bunkering operations in Yaroslavl during the "navigation period of 2015".

Ship & Bunker News Team
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