Reuters reports that oil quotations, despite the local decline due to news about Chinese stock rating, for the first time since December surely keep a mark in 40 dollars for one barrel of Brent crude oil. Financial analyst Timur Nigmatullin in conversation with BAFS “the Economy today” has connected this event with the American data – this refers primarily to the decline in oil production in the U.S., along with the reduction in the number operating in America at present rigs.
“In other news oil prices actually do not pay, respectively, if the United States will grow production or increase the number of working drilling rigs, it can happen correction and the recoil with the 40 dollars back, and quite substantial – around 10 percent of the total cost, but it can not speak,” – says Nigmatullin.
Economic expert Anton Shabanov, conversing with BAFS “the Economy today”, came to the conclusion that we cannot say that the growth of oil quotations caused only news from the USA.
“The fact that the U.S. reduce the amount of oil is, of course, important. Moreover, we have the classic law of supply and demand: when supply decreases and demand remains unchanged the price will rise. However, in this case, do not forget that quite recently Russia and countries-members of the cartel OPEC agreed not to increase the volumes of oil they produce today,” – said Shabanov.
According to Shabanov, otherwise, even amid this “drop down” volume in the US, if Russia or someone from OPEC would increase its production and replaced the Americans, then the oil would have not moved since a very low position where it was in the last two months.
“So in sum, when the level of production in the USA is declining and Russia and countries-members of OPEC as world leaders in this field, do not increase the volume of its oil production, the oil price starts to grow,” says Shabanov.
With regard to future oil prices, then, according to Shabanov, you have to conclude that today there is a global trend that oil prices grew up.
“Now just such situation in the market, such a situation that oil can grow up, but it’s just, in essence, a situation that cannot last forever and which has its own and very specific limits growth,” says Shabanov.
So, according to Shabanov, it is too early to say that oil will continue to grow in global terms, to levels of 100-120 dollars per barrel where it was before its fall.
“Another question that can be argued, that oil will grow more on this wave by 10-15 percent, but that of oil increased even higher, the global community of oil producers need to find new ways to solve this problem and take effective measures to stimulate its further growth, and while we have to admit that such a plan of action for today has not yet developed,” says Shabanov
The arrangement between Russia and countries-members of OPEC to freeze oil production, according to Shabanov, not directly influenced the modern movement in oil prices.
“It helped a little and, most likely, to stabilize the level of oil prices, but no more, and in a global sense this is clearly not significant impact on the market. Now, if Russia and the OPEC members agreed on reducing its production, then it would have really had a very strong impact on the further increase of oil prices,” – said Shabanov.
So, it was no more than signal to the market that between Moscow and the countries-members of OPEC produced agreement on the basis of which in the future will live the whole oil market, which, however, in itself had a beneficial effect on prices.
“The other issue is the impact negligible, because current growth was also caused by the second factor – the decline in US oil production that has led to the fact that oil was on the market less because these volumes no one seeks to replace,” – said Shabanov.