Domestic oil price trades at $97/bbl at the monthly auction
Domestic oil producers (mostly Ukrnafta sold 1.24 MMbbl of oil at a starting price of 97.0/bbl at an auction yesterday. The oil price decreased by 5% compared to the previous auction two weeks ago and was down by 8.8% year-over-year, bringing its year to date average to $101.9/bbl (+5.5% year-over-year).
Dragon Capital comments: The latest auction price suggests a premium of 4.5% to Urals FOB Novorossiysk. As the auction price formula is linked to the average price of imported Russian oil for the preceding 15 days, it normally produces a discount to Urals if the latter has been trending higher, but results in a premium in case of a downward Urals trend.