Pandemic coronavirus infection COVID-19 remains the main factor for the world oil market, but so far he is not inclined to dramatize the situation. This opinion was expressed by the “Rosbalt” the head of IAC “Alpari” Alexander Razuvaev.
According to him, “despite fears of the terrible dynamics of the pandemic COVID-19, which threaten a quick recovery in oil demand, the oil market while not inclined to dramatize the situation.”
“In the second wave of the epidemic is now on the market, few believe. Support prices for “black gold” have a rapid decline in US production, plus the commitment of OPEC members+ with compliance (enclosed in April, new) transactions shown by the results of the June Ministerial monitoring Committee of the Alliance”, — stated in the review of the expert.
He also suggests that “in July (Russian export brand) Urals, likely to be traded at a premium to (reference class) Brent”. “Support of cost Urals will have a decrease in shipments of raw materials in July, more than 40% due to the reduction of production in Russia in the framework of the agreement OPEC+. It is expected that the Russian Urals exports in July reduced to 534 thousand barrels per day (2.12 million tonnes) against June up to 770 thousand barrels per day (3,32 million tons), the lowest in the history of the monitoring since 2002” — emphasizes the analyst.
At the same time, he points out, “major oil refinery of the state-owned China are in talks about creating groups for joint purchases of oil.” “Members of the group — China Petroleum & Chemical (Sinopec), PetroChina, China National Offshore Oil Corporation and Sinochem Group. The group represents oil companies, which import more than 5 million barrels per day, making it the largest buyer of oil in the world,” — said Razuvaev.
He believes that “the new Alliance will give the Chinese companym able to avoid price wars among themselves and to reduce the cost of procurement, which, of course, negative for Russia.”
However, the expert concludes, “for oil prices the main thing now is the situation with the pandemic.” “New wave is a new quarantine and probably a new collapse in oil prices. It is hoped that the global economy will avoid this scenario and in July, the oil will cost $40-45 per barrel for Brent and Urals, likely to be traded at a premium to Brent. The base price of oil in the Russian budget for 2020 (level trim) is $42.4 per barrel”, — adds the analyst.
we also Recall that since the beginning of this year on the global oil market rode several waves of falling prices for “black gold”. A negative situation was caused by a whole complex of factors: a General overproduction of raw materials, a sharp drop in demand due to the rapid spread of coronavirus infection COVID-19 (March 11, was declared a pandemic) and concerns about its impact on the global economy and the collapse of the deal, OPEC+ (officially from April 1, but in fact, after fruitless negotiations of the countries-oil producers at a meeting on March 6 in Vienna).
However, on April 12 OPEC+ agreed on a new deal, joined by 23 States. The agreement will be valid for two years, from may 1, 2020 to may 1, 2022-th. In may—June this year, the production cuts will amount to 9.7 million barrels per day (from October 2018), then — until the end of 2020 — 8 million barrels, and 6 million by the end of April 2022. New business OPEC+ was a forced reaction of oil producing countries on the situation in the market and pressure from the United States. Overall, however, it is not blocked volumes decline in global demand, besides on the market have accumulated huge reserves of raw materials.
At the meeting on June 6, the member countries of OPEC+ extended a month — until the end of July — the period of validity of the agreement to reduce oil production to 9.7 million barrels per day.
Stories about how you tried to get help from the Russian state in terms of coronaries and what came of it, email it to COVID-19@rosbalt.ru
