By the end of 2017, oil will cost $40 per barrel

In 2017 the average oil will cost $50 per barrel, said the head of the Bank of Russia Elvira Nabiullina. At that, in her words, to predict the future price of “black gold” is extremely difficult for several reasons. First, it is still unclear whether they will continue on OPEC and other exporting countries outside the cartel to cut oil production. Secondly, against the increase of oil prices plays shale oil. According to experts, its production in the U.S. could increase by 400 thousand barrels per day. Therefore, according to experts, in the II quarter, the price could fall to $40 per barrel and the average for the year will be approximately $45 per barrel.


photo: Gennady Cherkasov

We will remind, in the end of last year OPEC agreed to cut total oil production by 1.2 million barrels per day — up to 32.5 million Later acceded to the agreement on 11 States outside the cartel, including Russia. The parties committed themselves to reduce production by 0.56 million per day. Of these, 300 thousand have on our country. The deal came into force on 1 January 2017 and is designed for the first 6 months with possibility of extension for another six months.

And after three months in Kuwait hosted the second meeting of the monitoring Committee of reducing production. The sides praised the execution of the agreements. “We discussed it and made an assessment that the February showed more positive dynamics. We have a positive attitude in General, our overall performance is 94%,” — said the head of Ministry Alexander Novak.

As for Russia, our country from October 2016, reduced the production of “black gold” on 185 thousand barrels per day. However, according to the Minister, this is not the limit. “In March according to the plans we have to go to the reduction of production of approximately 200 thousand barrels per day by October 2016. In April will be a gradual decline, by the end of April we expect, based on the companies ‘ plans to reach the target of 300 thousand barrels per day,” said Novak.

And as the Minister said, at the end of four months from the date of the agreement, we can begin to consider the possibility of further extension. Moreover, this issue will be considered for the extraction of shale oil in the United States, which tends to adjust oil prices. According to the forecasts of Novak, its production in 2017 could increase by 400 thousand barrels per day. The international energy Agency gives a similar assessment — an increase of 390 thousand barrels per day.

Shale oil is a concern and the Chairman of the Bank of Russia Elvira Nabiullina. As predicted the head of the regulator, by the end of 2017, the price of oil could fall to $40 a barrel. And in this case the average annual value of “black gold” will be around $50 per barrel.

Meanwhile, the main indicator of a successful agreement to reduce oil production — the world prices for “black gold” — is not encouraging. If at the beginning of March, a barrel cost more than $56, now barely up to $51. “Now distributed by OPEC information that the agreement had a beneficial impact on the market, do not find confirmation, if we analyze the real figures. When comparing supply and demand in the global balance, it appears that the oversupply of oil is approximately 300 thousand barrels per day. This, of course, less of a surplus of 1 million barrels, as it was before, but still offer significantly exceeds demand. Therefore, the oil and began to fall. In addition, if you look at the reports on various companies and the OPEC countries outside the cartel, the numbers don’t add up — such a rapid decline is not recorded. But the same Saudi Arabia is actively dumping on the market, offering discounts for their oil many consumers. I mean, she’s doing exactly what he did and before signing the agreement — fighting for market niches.”, — says “MK” specialist in the oil and gas market, partner RusEnergy Michael Krutikhin.

Therefore, as experts predict, is not excluded that already in the II quarter of 2017, the price may fall to $40 a barrel. And on average, we see approximately the same thing that happened in 2015-2016 — $45 per roll.

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