the Countries participating in the new deal OPEC+ at the meeting on Wednesday, may adjust the terms of the agreement on controlling the oil, but the price of “black gold” in the end can fall. This opinion was expressed by the “Rosbalt” head of data analysis Department CEX.IO Broker Yuriy Mazur.
He admits that “the terms of the deal, OPEC+ can really be reconsidered”. “First, the plan was originally spelled out in the agreement OPEC+, which said that from August to December 2020 the quota will be changed to 7.7 million barrels per day”, — is spoken in the comment of the expert.
secondly, he continues, “Russia and Saudi Arabia was initially against the decline in production, as it directly has a negative impact on the economies of these countries.” “After lengthy negotiations and an open price war has managed to negotiate a reduction in production volumes. But the fact is that not all the member countries of OPEC+ to meet their commitments and not cut back on production. Flagrant violators of the terms of the transaction are Angola and Nigeria,” says Mazur.
In his view, “if on 15 July, the quotas will be revised and approved at the level of 7.7 million barrels per day, the price of oil potentially has all chances to reach the $50 per barrel”. However, warns the analyst, “this approach also has pitfalls, including for Russia.” “The fact that the oil industry of the Russian Federation is not so flexible, like the Saudis, and requires additional, significant investments and changes to reduce or increase production. At the same time, as soon as the price of oil will go up, United States that are not members of OPEC+ is likely to increase the production of shale oil that can again bring down the price and/or to influence the redistribution of market share. Therefore, the increase in oil prices in this format may have negative consequences for the Russian economy”, — sums up the expert.
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 on 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.
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