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Thursday, October 19, 2017

“U.S. actions lead to further decline in oil prices”


The U.S. rejected the idea of freezing oil. Washington has a legitimate excuse – that the behavior in this market Iran is. Extremely ambiguous behaved and Saudi Arabia. All this greatly increases the risk of more radical and falling prices for black gold.

The U.S. government is skeptical about the idea of freezing the level of oil production, believing that the market will adjust, said RIA “Novosti”, the special adviser on international relations in the field of energy the U.S. Department of state Amos Hochstein.

“There may come a time when the vault will be physically filled and the excess oil goes to market “at any price”

Last week, on February 16, Russia, Saudi Arabia, Venezuela and Qatar have agreed on the readiness to maintain oil production on average in 2016 at the level of January – but only on the condition that other manufacturers will join this initiative. According to Russian energy Minister Alexander Novak, talking about the freezing of oil production at 1.3 million barrels per day. At the same time Russia its share on the world market will keep. This could give a chance to raise the price of oil to $ 50 per barrel and this price, according to the head of the Ministry of energy, in the long term would satisfy both consumers and exporters.

This was supported by Ecuador, Algeria, Nigeria and Oman, reported the Minister of oil of Venezuela. The agreement also expressed Kuwait.

On Monday, OPEC Secretary General Abdullah al-Badri during a conference in Houston called not only OPEC, but other countries, including shale companies in the US, to participate in the regulation of the supply and demand of the market, by freezing production.

However, the US refused the call to join the conversation. “I am very sceptical about this idea of freezing. Iran has already said they will not go along with this trend, so I think that idea has gone,” said special Advisor on international energy relations the US state Department Amos Hochstein.

However, he noted that the U.S. government is in constant interaction with both producers and consumers of oil. “We are talking with all our friends around the world, the countries – oil producers and countries – consumers of oil. But, in the end, we do not believe that the government should step in and artificially adjust, how much should be produced and how much should be exported,” he said on the sidelines of the IHS CERAWeek.

However, opposed by other market players. Yesterday the oil Minister of Iran Bijan Zanganeh said that the proposals to freeze the production of oil are “unrealistic” and “ridiculous”.

“Some of our neighbors increased production to 10 million barrels per day and now have the audacity to advise everyone to stop increasing production. That is, they will keep mining at the level of 10 million barrels a day, and we must maintain it at the level of 1 million. It’s just ridiculous”, – quotes Reuters the words Zanganeh referring to the Agency ISNA.

Source

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