... strengthen the effect on the market (earlier, the end date for the voluntary cut had not been determined), on the one hand, and to get in sync with its OPEC+ partners acting as a “united front”, on the other hand. The latter factor is important for Russia in terms of OPEC+ political posturing.
The development amps up the announced decision to cut production volumes. Immediately after the OPEC+ participants announced production adjustments, the commodity exchange saw a surge of oil prices. But this was a psychological ...
... then was the quarantine, too) and a package about the conversion (or rather not so much of a conversion) of the OPEC + into an OPEC ++.
Of course, there is a still a long way to go before the names of the members of the Saudi royal dynasty are referred ... ..., energy gurus, of course, actively participated in the survey after the events in Vienna (by the way, nobody pushed the non-Russian experts to talk his way, but they’ve made a couple of revealing comments regarding the true role played by the Saudis)....
As the OPEC+ deal has expired, Russia and Saudi Arabia remain at odds, though the United States offered encouraging words that production cuts might be negotiated
The Russian-Saudi feud over oil production has destabilized the market even as the industry faces anemic demand and the ...
On July 23, 2017, Russia’s Energy Minister Alexander Novak told the Financial Times that Libya should join the oil supply production cut agreement brokered by Moscow and OPEC last December. Russia’s decision to target Libya, alongside Nigeria and US shale gas, surprised some observers, as Moscow retains tight links to military chieftain Khalifa Haftar, who holds de facto control over many of Libya’s oil-producing eastern regions and ...
... countries both need oil dollars, investments and new technology.
Second and perhaps more importantly, gone are the days when OPEC could influence the oil prices to any significant extent, either single-handedly or in concert with other exporters. Even if OPEC and Russia now go with the output freeze, the possibility of this being very low, the impact on the market will be minimal. If crude prices rise above $50 to $60, this will put US shale oil back on the agenda, resulting in another price drop. Shale oil production ...
... Cooperation Council (GCC) producers agreed to freeze production with Russia,
giving oil prices a boost
. (The attempt was shortly-lived as Iran quickly declared that it had no intention of freezing its output.) However, there remain several barriers to any OPEC-Russia or GCC-Russia cooperation on oil production.
First, Russia is perceived to be untrustworthy. (Whether or not it is
actually
untrustworthy is of second-order importance—perceptions are what dictate decisions.) In terms of oil, Saudi Arabia ...
... However, there are several signs that it is too early to expect a substantial price rise.
First, it has to be noted that on January 11, 2016 (production is expected to be frozen at the level reached during this period), production hit an
all-time high
: Russia was producing 10.9 million barrels a day; Saudi Arabia 10.091 million barrels; and OPEC 32.3 million barrels, far in excess of its quota. So, even if the agreement comes into force, no serious price growth should be expected, and there will still be an oil glut in the market.
Even if the agreement comes into force, no serious price ...
... rapidly growing economies, and therefore they see no reason to revise their policy. Hence, the next OPEC meeting and, accordingly, any major changes in the oil market, should not be expected before the end of October.
Factor 4: Russia’s policy
, Russia has stepped up oil exports even faster than OPEC: in the first six months of the year it increased exports by almost 10 percent and ranks top in in the production of this type of fuel.
It is obvious that Russia had to follow the general trend of increasing oil production. In this environment, ...
... in 2015.
REUTERS/Leonhard Foeger
In any case, it would suit the bureaucracy of
OPEC. When the organisation’s status is inflated
it benefits those who work for it.
But this will only have an impact if other oil producers that are not part of OPEC, for example Russia, also reduce their output. The author understands that Rosneft’s chief Igor Sechin was discussing such an idea with his foreign colleagues in the run-up to the meeting of the cartel. Russia’s Energy Minister Alexander Novak mentioned ...
The OPEC refusal to decrease oil production and a subsequent price fall to a 4-year low make the future of Russian economy tenuous. Since July 2014, the Russian ruble depreciated to the U.S. dollar by 45%, and the economic growth stalled. Falling oil prices together with western sanctions induce Russian experts to seek alternative sources to fill the budget....