Russia has earned more than all the news about the meeting in Doha

Russia in the lead

Even though the major oil-producing countries failed to stabilize the market through an agreement to freeze production, which was never concluded in Doha on April 17, already waiting this arrangement allowed them to earn $32 billion of additional revenue due to Bloomberg calculations based on estimates of the International energy Agency (IEA).

Since the appearance of the first rumors that Saudi Arabia and Russia are holding consultations on this subject, quotes jumped by 29%. Support prices have also had a reduction in US production amid falling costs experiencing financial difficulties companies and interruptions in oil supplies from Nigeria and Iraq. Two months prior to the Doha negotiations, Brent crude oil rose by $10/bbl, up to $43/bbl. The price rally has increased the value of Russia sold oil for $3.7 billion In the same time, Saudi Arabia additionally earned $3.3 billion, U.S. – $3 billion, Canada – $1.5 billion

A five-year high

On Thursday, oil is trading at five-month highs after the decline in US production to the lowest level since October 2014 in anticipation of the new round of consultations on frozen production, which is expected in may. June futures for Brent in London by 16:10 GMT depreciated by 0.72% to $45,60 per barrel. after rising by 6.7% over the previous two session; the results of environment contracts has increased in price by 4% to $45,80/bbl. Support to quotations is rendered by two factors. First, oil production in the U.S. for the week to 15 April was reduced to 8.95 million barrels./a day, according to the U.S. energy information. This is already the 12th decline in 13 weeks.

Data released yesterday in the USA “can not be called too optimistic, but they were enough to provoke an additional demand for oil, said Bloomberg analyst at Petromatrix Olivier Jacob. – “The day before Brent was able to break the resistance level at $45/bbl., and WTI will test this indicator today, but after that and up to $46,80/bbl. not far”.

“Yesterday’s figures for the extraction had a positive impact on the quotations, – said the Agency Angus Nicholson, an analyst at IG Ltd., With this in mind, as well as the running dynamics in oil prices, especially in the context of the breakdown of the Doha agreement, the level of $40/bbl. looks more like a new stable minimum, if the prices will fluctuate above it in the next week or two. June futures for WTI in new York on 16:10 depreciated by 0.32% to $43,85/bbl.

Secondly, the market was encouraged by news that the meeting of leading oil-producing countries, which is planned to give new impetus to the consultations about the freezing of production, will take place next month and not in June as previously expected. Members of the Organization of countries — exporters of oil (OPEC) and other producers may hold a meeting in Russia in may, Bloomberg reported yesterday citing Deputy oil Minister of Iraq Fayyad al-NIMA. According to the Deputy Minister that Iraq is planning to participate in a possible meeting in Russia. He also noted that in Baghdad see the rise in world oil prices despite the failure of negotiations in Doha. Minister of energy Alexander Novak, commenting on the statements by the representatives of the Iraqi Ministry, said arrangements to hold the may meeting on oil in Russia. “There is no such agreement. First, they have until June to settle a situation, and then we’ll understand [whether the meeting],” he said.

Following statements by Iraqi officials, oil futures continued to rise and reached the highest level since November 25, 2015. The may WTI contracts rose 3.8% to $42,63/bbl. on the new York Mercantile exchange on Wednesday. June contract Brent has risen in price on 4%, to $45,80/bbl. “New hope that production would be frozen and forced traders to close short positions,’ said Phil Flynn, analyst at Price Futures Group.

A return to balance

OPEC Secretary-General Abdalla El-Badri today in Paris International oil summit stated that the high level of oil reserves is a problem which needs to solve OPEC with other oil-producing countries. According to him, about 75% of the excess commercial reserves are concentrated in North America. This year, the rebalancing of the oil market will continue, I’m sure El-Badri. The expenditures of the oil companies on exploration and production will fall by 15% this year, predicts the General Secretary.