“Production and so on high”: what the experts think about the agreements with OPEC


The Analyst Of Gazprombank Alexander Nazarov

“We and the Saudis are close to historically high levels of production. Moreover, according to the Central dispatching management of FEC, in January we had a historic record of more than 10.8 million barrels per day. That is, they and we are ready to install the ceiling — the production is already at maximum. At current oil prices production in Russia by the end of the year will organically decline, Saudi Arabia is also not possible to increase because the spare capacity they are at the limit. Now is critical to see the reaction of other manufacturers that did not participate in this meeting, but to participate which called, is Iran and Iraq. They planned to increase production this year. After the meeting of Ministers of oil prices rolled back a bit, but long-term trends while others. I believe that we are near the lows for oil prices, but the recovery of the quotations will not be fast, it may begin only at the end of this year.”

Analyst of Sberbank CIB Valery Nesterov

“For speculators this is big news, which will boost oil prices for some time, remains uncertain. Despite sceptical forecasts, contacts between oil producers resulted in a series of consultations and even a kind of agreement, if still vague. But while this arrangement looks like the call by let a reputable and large manufacturers, but still it is not the decision of those, who may now greatly increase production: Iran, Iraq, Libya, and the oil producers in the United States.
In addition, there is the story is not very productive cooperation between OPEC and Russia in the past, as well as an extensive history of non-compliance on various production limitations (quotas) and technical difficulties in tracking the implementation of those agreements in the OPEC. Therefore, today’s decision is welcome, but it has short term consequences for the market and it is premature to talk about what began the process of restoring prices to the level $50-60 per barrel”.

Senior analyst at UBS Maxim Moshkov

“No decision yet on freezing, there is only the intention. In the current market conditions this decision is unlikely to accept. The meeting was unexpected, so waiting for real solutions to the price grew, but because they are usually, in fact, were not, the price fell again. If the decision to reduce production, it will be very effective for the oil market in General and for the budget. But in fact today there was another consultation without cost to the manufacturers. In the second half we expect a new growth of production in Russia. All projects that are in this year, we expect growth of about 180 thousand barrels per day. In March triggered a large Deposit Novy port “Gazprom Neft”, continued production growth at Bashneft in the second quarter should start Filanovskoye the LUKOIL. How will a decision on freezing or reducing the production of Russian oil companies, to comment on the early, the actual steps are not done.”

Analyst Nordea Bank Dmitry Savchenko

“Hints of reduction of oil production the market is not heard. Such verbal intervention is unlikely to be the basis for long-term strengthening of oil prices. We forecast year-end price per barrel $40, but this is due to the reduction of investment in the oil sector. Last year their volume decreased by 15%, we expect a decline of 20%. Prospects of the Russian currency remain vague”.

Chief economist for Russia and CIS Bank of America Merrill Lynch Vladimir Osakovsky

“The impact on the ruble will depend on how the application will react to oil prices. The first reaction was negative, which is surprising. The price of a barrel fell by 3-4%. Apparently, the punters, the statement about the freezing of extraction is not particularly trust. Nevertheless, oil prices should recover, the oil market needs to be rebalanced. Our official forecast — in an average year, oil will cost $46 per barrel. A dollar will cost 65 rubles on average one Can assume that the current oil price is close to the minimum value, respectively, and the value of the ruble, too.”

Chief economist, Eurasian development Bank Yaroslav Lissovolik

“You can say that the fact of agreement a positive development for the ruble. It offers the prospect of stabilizing oil prices. So in the long run it will positively affect the value of the Russian currency. In the next few months we can see the strengthening of the ruble. I would expect the rate of 70 rubles per dollar or even lower”.

Senior analyst for oil and gas sector, “Aton” Alexander Kornilov

“The official agreement is only between the three members of OPEC, and what others think about freezing production, we can only guess. In the final statement of the position of the Ministry of energy said, “We are ready to freeze the prey, if this solution will join other manufacturers”. But historically within OPEC has rarely seen the agreement, so does this arrangement, the big question: for example, already has a certain level of quotas [for the extraction] on OPEC, but no one takes the. Both countries will see that everything is frozen and no one produces anything further is unclear. In addition, there is Iran, who next year is going to significantly increase production. It is only freezing the current level of output, but not the reduction, that is the excess that is on the market now — 1.5 million bpd, will remain.

Russian oil companies have fixed their limits of production at the level of January, and in January Russia has shown a new record and to maintain production at this level will be easy. It is logical that at the current oil price level of production in Russia will not grow and will remain at last year’s peak, or even slightly below. Therefore, for the Russian segment of the oil production today’s meeting of Ministers so few.”