The coordinated reduction of oil production will eventually be doomed to failure, said experts Goldman Sachs Group Inc, citing the fact that the strategy of OPEC to maintain their market share starts to work.
MOSCOW, 1 Feb. Analysts at us banking giant Goldman Sachs Group Inc. I believe that a coordinated reduction of oil production the world’s largest oil producers, including Russia and Saudi Arabia, unlikely and ultimately doomed to failure.
“We continue to believe that the agreed production cuts is unlikely and will ultimately be doomed to failure”, — experts say the Bank, whose words lead Agency Bloomberg. They add that the attempts by OPEC to cut production now would be counterproductive, as the strategy of the members of the organization to maintain its market share begins to work.
Goldman analysts believe that the emerging market trends, in particular, the possible reduction of production in countries outside OPEC, prove that members of the organization will keep production at current levels to force the market to readjust. Therefore, experts do not expect reduction in production if growth of the world economy will not sharply slow down.
Not in favor of the agreed reduction, according to analysts of the Bank, plays and cancellation of international sanctions against Iran. “Increasing oil production in Iran is likely to be a significant obstacle to any actions of OPEC… Their goal of recovery of output remains aggressive, and the desire to reclaim the market share is unbreakable. The decline in production, most likely, it will be necessary to accommodate production growth in Iran, but this agreement seems unlikely given the recent tensions with Saudi Arabia,” the analysts said.
Last week energy Minister Alexander Novak confirmed Russia’s readiness to start negotiations with your “oil colleagues” on a possible meeting of producing countries in February. According to the head of the Russian energy Ministry, sounded the initiative to cut production in each country up to 5%, it may become the subject of discussion at the planned meeting, but this requires General agreement of all countries. Thus after statements of the Russian Minister, the Agency Bloomberg with reference to the delegates from OPEC said that while the meeting to discuss a possible production decline is not planned.
In addition, the Minister of energy of Russia Alexander Novak on Monday will hold a meeting with the Minister of oil of Venezuela, Eulogio del Pino. This trip takes place at the President of Venezuela, Nicolas Maduro, sent del Pino on a tour of OPEC countries and Nations not belonging to this organization, so he enlisted the support for joint action to halt the fall in oil prices. Maduro said earlier that proposes to harmonize the findings of measures of reinstatement of the oil market, if all stakeholders come to an agreement.