Oil Prices Seen Up by 1/3rd After Duty Cuts

Domestic oil prices for December delivery could go up by one-third compared with November, as next month's oil export duty could be set at $192.10 per ton, a 33 percent decrease from November, traders said.

Prices per ton at western Siberian metering points could rise by about 1,150 rubles ($41.92) versus November to 4,000 rubles to 4,500 rubles, five traders from Russian oil majors said Monday.

But with global oil prices sinking, domestic oil prices can also feel under pressure. The price for Urals crude has been well below $50 per barrel since late last week.

Domestic prices are based on export netbacks, or the return the oil companies receive on a barrel of oil shipped to international markets.

Russia used to set the oil export duty based on the monitoring of Urals' prices during two months with a one-month time lag but had to change the price-monitoring period twice since summer to protect producers from sharp losses as prices fall.

The government has said it will revise oil export duties monthly rather then every two months.

Up to 3 million tons of crude is sold monthly by small producers and major firms that lack refining capacity.