The key to restoring the balance of supply and demand in the oil market may be the United States, said the head of oil industry and markets the International energy Agency (IEA) Neil Atkinson in an interview with CNBC on Friday.
According to him, oil production in the US represents the greatest interest, “because it is a dynamic and volatility of the sector, which largely depends on the market return to balance”.
Demand and supply in the market closer to balance in the second half of 2016, said Atkinson. It is expected that the U.S. will continue to cut production of shale oil this year, but, nevertheless, it is likely that they will be able again to increase production in the future, according to the expert from the IEA.
Atkinson in an interview also said that after the failure of negotiations to freeze production in Doha exporters will continue to “pump as much oil as you can.” “In the world after Doha, when we are still in essentially a free market of oil, they (the Russians) will pump out as much oil as the market will absorb, and the Saudis say nearly the same thing,” he said.
In March Neil Atkinson warned that a possible agreement oil exporters of frozen production is unlikely to affect the market. He noted that from the countries who are going to the negotiations in Doha, only Saudi Arabia able to increase production. “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.
A meeting of exporters in Doha on April 17, ended inconclusively. Before the meeting, Saudi Arabia and several other OPEC members have changed their position and put forward additional requirements to the agreement, said the head of the energy Ministry of Russia Alexander Novak.
“We do not believe the Doha negotiations a failure. There was a chance that could use the country to reduce these terms. Did not work, but the tragedy should not do it”, he said in an interview.
The Financial Times wrote that the collapse of negotiations led pressure Saudi Deputy crown Prince Mohammed bin Salman on the delegation of the Kingdom, resulting in the negotiations of the Saudi delegation insisted on Iran’s accession to the agreement. Iran to join the initiative refused and the talks were not present.
Before the talks, Mohammed bin Salman stated that Saudi Arabia can immediately increase oil production to more than 1 million barrels per day. On 19 April, Deputy energy Minister Kirill Molodtsov said that Russia can increase oil production in 2016. “Why not?… I will say this — there is such a possibility. 540 (million tons),” Molodtsov said (quoted by RIA Novosti).