Analysts: talk of the unity of the oil market will talk

Analysts: talk of the unity of the oil market will talk


In the near future can hardly be expected from oil producers some joint action OPEC members may hold meetings, but they will most likely be futile, according to analysts.

MOSCOW, 27 Jan. The probability of taking any concerted action by oil-producing countries, according to analysts polled quite low. Many experts note that, according to most forecasts, the recovery in prices for “black gold” can begin in the second half of this year, so many oil producers would rather wait than to take on any commitments to reduce production.

As for Russia, it is unlikely to the artificial reduction in production due to technical difficulties of the process, analysts say.

On Tuesday, OPEC made a loud statement aimed at the establishment of the Alliance with Russia and other oil-producing countries. The purpose of this Covenant must be to reduce production and stop the fall of prices for raw materials, reported the newspaper The Telegraph. Earlier, the Secretary General of cartel Abdalla Salem al-Badri and the organization’s President Emmanuel IBE Cacique expressed the need for coordination of efforts of all countries to this end.

In addition, it became known that the Minister of oil and mining of Venezuela, Eulogio del Pino plans to attend the OPEC member countries and non member States in this organization, in an attempt to gain support for joint action to halt the fall in oil prices.

Earlier on Wednesday the President’s press Secretary Dmitry Peskov said that Russia is discussing with partners, including with Saudi Arabia, a joint action in the oil market, but in terms of applied use of specifics no.

“In my opinion, in the near future one can hardly expect the oil producers of any joint action. The fact is that even within already formed a cartel (OPEC) now there is no unity of views on further actions”, — the analyst of group of companies “Finam” Bogdan Zvarich.

“I think in these conversations is not unusual. Because we hear it on the last one and a half years, when prices are falling, and OPEC members and other oil-producing countries have expressed interest in joint discussions on what we can do. But so far concrete actions as such we do not see, and kept every man for himself… the Meeting, certainly some will, they were in the past, but did not lead to any result”, — said the senior analyst of investment group “ATON” Alexander Kornilov.

Wait until growth

Analysts also doubt that Russia will go to some kind of agreement with other producing countries. In particular, Vice-President and spokesman of the largest oil companies of Russia “Rosneft” Mikhail Leontiev recalled that in Russia there are both logical and technical constraints to reduce production. “We have the majority of this production is in a climate zone in which the cessation of mining activities can damage production assets, because it’s cold. We have a production of less plastic,” he says.

“But cooperation also means accepting certain obligations that must be fulfilled. If Saudi Arabia is to do just that the technology of oil production in the Russian Federation hardly allows changes of volume of production. We have a large amount of their own processing and large amount of export commitments that need to be closed, especially Rosneft, many contracts were signed when the price of oil at 100 dollars per barrel”, — said the chief editor for commodity markets Thomson Reuters Kortes Alexander Ershov.

At the same time, Zvarych from “Finam” does not exclude an emergency meeting of OPEC members with the further fall of prices. “Against this background, in my opinion, the possibility of some agreements are quite low. It is possible that in case of reduction in oil prices in the region of 25 dollars per barrel we will see an emergency OPEC summit, which will try to solve the problem with the predominance of supply over consumption,” — said the expert.

“If the price will remain around 30 dollars, most likely, already in the second half of the year in the various regions would begin stagnation or decline, triggered by the decline of investment in the development of new fields. As a result already by the end of the year, oil prices can climb in the region of 50-55 dollars per barrel”, — he added.

Analysts at Bank of America Merill Lynch also believe that the balance on the world oil market can be achieved in the third quarter of this year, which will lead to a rise in average annual oil prices to $ 46 per barrel.