The price of oil Brent for this summer may be about 35 dollars per barrel.
This opinion was expressed in comments to UKRINFORM partner of the RusEnergy consulting Agency Mikhail Krutikhin.
“To predict oil prices during the summer difficult. But in General now a picture emerges that will be somewhere around $ 35 per barrel – and it will be the price, which can satisfy many,” he said.
Russian independent analyst oil and gas sector is convinced that an agreement within OPEC+ yields results, however, “fully stabilize market is not yet possible”.
In particular, he pointed to the fact that OPEC pretty poor discipline in the execution of commitments, there is also the ability to market oil from Libya. In addition, adopted the pandemic COVID-19 restrictive measures may last longer than expected, especially given fears of a “second wave”. A separate factor to consider – the situation in the US economy.
Krutikhin noted that this time, unlike previous agreements within OPEC+ Russia fulfills its obligations and have reduced oil production. At the same time, he pointed out that already in August may not be enough for those measures now accepted by Russian companies, so they can be forced to switch to the closure of old wells. And later open them again it will be already unprofitable. “If that happens, it may happen that the Russian industry will experience a strong shock and will not recover. That is, will not resume production at the level that he was in 2019,” – said the expert.
According to him, the dispute between Moscow and Riyadh over the oil deal could be resolved with the assistance of the President of the United States. “Trump is apparently very serious talk with Putin, which slammed the door and left the Association called on OPEC+. And Putin had to ask the Saudis to apologize for the lies he made about their motives, and to agree to a much larger decline in Russian oil production than envisaged by the initial agreement,” said Krutikhin, adding that “Russia is deeply humiliated, and accepted the humiliating conditions of this new agreement.”
As reported, the OPEC countries at the talks on March 6, are unable to extend the agreement to reduce oil production. The stumbling block was the position of Russia, which refused to toughen the restrictions – as proposed by Saudi Arabia. After that oil prices, which are already under pressure due to pandemic coronavirus, rapidly went down.
Against this background, on 12 April during the Ministerial meeting of the countries-exporters of oil in the OPEC format+ adopted a new agreement that provided for the daily decline in total oil production to 9.7 million barrels, as of 1 may. It was planned that this period will last for two months – until June 30.
For the next period, from 1 July to 31 December, total agreed reduction in oil production should reach 7.7 million barrels. According to the agreement then was to come the third period, which included a reduction in production at 5.8 million barrels per day for 16 months until 30 April 2022.
June 6 in the course of a virtual meeting of the Ministers in the format of OPEC+ a decision was made to extend the arrangements under the April agreement. The first stage of adjustment of oil production to decrease, which included a reduction of 9.7 million barrels, was extended until the end of July.