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Oil prices may go back up next year

Featured Oil prices may go back up next year
KINGSTON, December 26, 2014 - As Jamaicans begin to reap the benefits from the decline in world oil prices, Saudi Arabia has indicated that it is expecting oil prices to be at least 43% higher next year. The indication came in the kingdom's 2015 budget released on Wednesday.

The figures show the Saudis have budgeted on the price of  oil being $80 per barrel in what is being seen as a sign of  confidence in the market. 

Oil now trades at $56 per barrel. The Saudi's forecast came days after Iraq, said its 2015 budget is based on oil averaging $60 dollars next year.

The development caused oil futures in electronic trading to climb by 0.7% after slumping 2.2% on Wednesday. Floor trading was closed for Christmas yesterday. Oil is poised for its steepest annual decline since 2008.
                                                
In the meantime, Petrojam says it's available for discussions with the Private Sector Organisation of  Jamaica, PSOJ or any other entity about its pricing mechanism after coming in for criticisms that it is not passing on the full reduction in fuel prices to the market.

Petrojam made the offer after dismissing the PSOJ's assertion earlier this week that it is too slow to pass on price reductions but passes on increases at a faster pace. 

The PSOJ had pointed out that its research shows Petrojam reduced its prices by 12% between June and November, even as the U.S. Gulf  Coast reference prices it uses as a benchmark fell 30.5%

Petrojam however pointed out that the PSOJ's calculation of  its price reduction is wrong because its prices fell by 16%in the period. It said its reduction is in line with the decrease in fuel prices in Miami. Fuel prices in Miami fell 18% between June and November. 

Petrojam however failed to address why its reductions were not in line with its own reference prices.                              

Last modified onFriday, 26 December 2014 10:23

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