Moscow. May 18. INTERFAX.RU – Oil prices resumed growth at the auctions on Thursday, supported by expectations that OPEC and non-OPEC next week to extend the agreement on the limitation of oil production, reports AP.
The price of July futures for Brent crude on the London ICE Futures exchange to 18:10 Moscow time increased by 22 cents (0.42 percent) to $52,43 per barrel. Earlier in the trading the futures fell to $51,11 per barrel.
The June contract for WTI crude oil in electronic trading on the new York Mercantile exchange (NYMEX) climbed 17 cents (0,35%) – to $49: 24 describes a barrel.
“It looks like the markets held their breath before the OPEC meeting next week,” says the risk Manager in the oil market is Global Risk Management Michael Poulsen.
The Minister of energy of Algeria Nour Eldeen of Boutarfa expressed willingness to extend the agreement by OPEC and non-OPEC on reduction of oil production for nine months instead of the previously planned six months.
Almost all analysts (24 of 25), interviewed by Bloomberg, believe that the agreement by OPEC and non-OPEC will be valid for at least six months, while half expect that the agreement will be extended for nine months.
Saudi Arabia is the coordinator on behalf of OPEC, it has taken on the mission to compensate for their resources in the event of a breach of the Treaty on the reduction of oil production in other countries of the cartel, informed on Thursday the head of “Rosneft” Igor Sechin. “We will fulfill obligations, but we will monitor all parties and will be ready for competition in case of failure,” he said.
According to Research analysts BMI, the extension of transactions on the limitation of oil production, expected at the OPEC meeting on 25 may, in the short term is unlikely to spur the growth of quotations, as the oil market had already put this solution in prices. While BMI predicts an average Brent price of $57 per barrel, taking into account the extension of this agreement.
Reaching the target production level, OPEC will return to the market in 2018, in full amount, and outside of the cartel’s oil production will continue to grow in the North sea, Brazil and the USA, which will increase pressure on prices, believe in BMI.
Meanwhile, experts Commerzbank believe that in case of preservation of existing restrictions on production before the end of 2017 in the second half of the oil market could face a significant shortage of supply.