In 2018 the main influence on the ruble will have five main factors. This increase in the extraction of raw materials in the United States, OPEC initiatives to continue to limit production, geopolitical turbulence, low volatility and speculative. As suggested by Bloomberg, in each period of time they will take fundamental for pricing, but forget not one of them stands up to the end of next year.
The price of oil next year, mainly determined by the ratio of supply and demand. As experts say Bloomberg, to the fore issued production prospects of “black gold” in the USA, and produced not in the traditional way, and with the help of extraction of hydrocarbons from shale deposits.
It is this raw material in the first place is a threat to the growth of world oil prices. American manufacturers continue to invest significant sums in the development of new shale deposits. In particular, the Chevron company next year intends to invest in the development of the mining province of the Permian Basin for about $4 billion, These investments will increase the capacity of this structure up to 400 thousand barrels per day. All in all, by 2020 production within the Permian Basin will increase by 1.4 million to 3.8 million barrels per day.
However, OPEC production records will depend on the price scenario. It is likely that money market conditions would be in favor of American companies. In 2014, when a barrel of oil was estimated at nearly $115, the cost of shale production reached $85. Then the prices decreased and producers of shale oil in the United States had to reduce costs and introduce new technologies.
As a result, managed to reduce the cost to $23. This is comparable to the traditional producers of “black gold” in Saudi Arabia, the production cost per barrel is $9, and in Russia — about $20-25. If oil prices in 2018 will be as now to hold the line at $60 per barrel, the cost of production of “black gold” will continue, which will give grounds for market traders to focus on lower price — an average $50 per barrel. “Serious threat is the potential decline in oil prices. Increasing U.S. shale oil and gas. They will try to implement in the new year it is a strategic advantage,” — said General Director of the Center for political analysis Pavel Danilin.
The struggle of middle Eastern, Latin American and European producers for the high cost of a barrel may not be useful, like the one which was able to obtain after the announcement of the Memorandum of OPEC to reduce oil production. This is the second component of the pressure on oil prices. Many of the countries of the Gulf of Mexico, for example, Venezuela is currently experiencing a global financial difficulties, so it is not profitable to reduce production. It is hoped that the expansion of the list of countries participating in the agreement OPEC+ will be able to neutralize the quantities of raw materials that can be spilled out to the world market.
Third place in the list of the most important events of next year for Russia is the options for the supply of “black gold” in the coming months. Now contracts for December 2018 off-hand for $100 per barrel, which is the most popular price category at the moment. Moreover, the cost of raw materials may rise will continue if the escalation of the situation in the middle East. Iran and Saudi Arabia are quite capable to build up our own production – however, the cost of the product with a result at risk to fall and go below $50 per barrel.
The fourth factor, ready to have a negative effect on the trading price of hydrocarbons is low price volatility of raw materials on the trading floors. This year speculators were among the major participants of the oil market. Thanks to their deals, including prices on “black gold” remain at approximately $60. Meanwhile, according to the analysts of Societe Generale, next year is momentary playing on the stock exchanges thing of the past, and volatility will continue to decline. This trend has had an impact on oil prices.
“No third party mainly speculative players capable of inflicting significant damage to the oil. Perhaps the drop in oil below $40 per barrel. Exit from the game most players will can lead to a drop in oil prices below $40. this movement can be considered the fifth cause of the fall in oil prices,” — said the head of analytical Department UK “BK-Savings” Sergey Suverov.