Possible deal the biggest oil exporters of frozen production is unlikely to affect the market, said head of oil industry and markets the International energy Agency (IEA) Neil Atkinson. He explained that among the countries intending to participate in the meeting in Qatar, only Saudi Arabia able to increase production levels, Reuters reports.
“So freezing the production, perhaps quite meaningless. Mostly it is a kind of gesture, which presumably is aimed at <…> to create the confidence that the oil prices stabilize,” said Atkinson.
However, he warned that “historic” investment programs of the oil companies increases the risk of “shocks” to supply “not-too-distant future.” He added that if in 2017 and 2018 investments in development and production will not resume oil deliveries “will not be able to meet the demand,” reports Bloomberg. In this case, according to Atkinson, the price of oil will rise sharply.
“You need a lot of investment in order just to stand still”, — the expert said the IEA. To maintain the current level of oil production needs about $300 billion, said Atkinson.
According to his forecast, the demand and supply in the oil market will reach balance in 2017. In the period from 2018 until 2021, reserves of oil will decline, while world demand will grow by 1.2% a year, says Atkinson. From 2009 to 2015, global demand grew by 1.7% a year, says Blomberg.
In mid-March, the IEA said that oil prices may have reached bottom and can see the light at the end of the “long dark tunnel”. At the same time, the Agency warned that it may not be completely sure exactly when the market reaches balance. In turn, the Bank of Russia on 18 March said it expected a new decrease in oil prices because of the oversupply.
Representatives of the countries-exporters of oil on April 17 meet in Doha to discuss an agreement to freeze production at the level of January 2016. The head of the Russian Ministry of energy Alexander Novak said earlier that Russia is ready to freeze the production at the level of January, if so will other exporters. In turn, Iran said it would sign an agreement only when you get to desanctions the level of production. The Financial Times citing a source, wrote that Saudi Arabia is ready to join the initiative, even if Iran will not participate in it.