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Tuesday, July 18, 2017

The meeting between Russia and OPEC will be held in October

Apparently, the coming months will be a time of new test oil prices. OPEC once again brewing division and it is not clear what “baggage” will come to the main producing countries by October, when can be held regular talks on a possible decrease in the production of “black gold”. Nigeria is confident that the reduction will not occur. Venezuela, by contrast, calls for positive decision on this issue. Experts believe that the chances of the development of the situation according to the latest script. Then, before the end of the year oil prices will be fixed at $50 per barrel, but the Russian currency will be in the corridor 61 to 63 rubles per dollar.

photo: Gennady Cherkasov

Crashing on 2 August to a point below $42, the oil small steps wins back his cave-in and the second week a little, but more expensive. By 16 August it was above $48.

The increase was due to growing rumors about the freezing of OPEC production. The representatives of Saudi Arabia has repeatedly hinted that it is willing to discuss this issue. The Minister of energy of Venezuela decided to organize a tour of the countries-exporters of oil and the first person he visited was Iran.

Tehran has not yet decided whether to participate in the meeting in Algeria, but in the fall of this country will reach the level of production of oil, which she had prior to the imposition of sanctions. Therefore, the Iranian growth factor production Iran will decrease.

Earlier on the resumption of negotiations on the “frozen” production said Ecuador and Kuwait.

Initially it was assumed that the meeting of the countries-exporters will be held 26-28 September in Algeria in the framework of the International energy forum. But as reported in the Ministry of energy 16 August, the next meeting of the energy dialogue “Russia-OPEC” will be held in October. The exact date will be agreed through diplomatic channels in the near future. OPEC representatives said that they have already started preparing the agenda of the event.

“The Western media write about the possibility of the agreement of Russia with OPEC to freeze oil production, and indeed the odds are there, as Iran has significantly increased the production of hydrocarbons and potentially will not be so strong to resist freezing as before, but Saudi Arabia makes long-term bet on the development of high-tech industries, not the commodity sector, so, too, can go on agreement,” — said the head of analytical Department UK “BK-Savings” Sergey Suverov.

If miners still agree, it is hoped that the cost of “black gold” will be fixed at the level of $50 before the end of the year, maybe sooner.

For our country this likely forecast is especially important. Recall that the 2016 budget is designed exactly for this indicator. While the budget deficit and so reaches 3% of GDP is 2.1 trillion roubles. Yet the situation is much narrower. We are talking about 4-5% of GDP, i.e. the amount in excess of 4 trillion rubles per year. And close the hole nothing. So $50 a barrel – it’s just the salvation of the Russian economy and budget.

The case is still in the ruble. At $50 per barrel, there is every reason to think that the Russian currency will be established in the corridor 61-63 rubles per barrel and will stay at this level long enough.


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