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Sunday, October 23, 2016

Freeze oil can 28 Sep

The main oil exporters have matured to conclude an agreement on reducing production. This is in anticipation of the energy forum in Algeria, said the President of Venezuela, Nicolas Maduro. According to him, to take this step agree Ecuador and Iran.

photo: Gennady Cherkasov

Nicolas Maduro is struggling for a reason for high oil prices. Despite the fact that Venezuela is among the ten largest producers of “black gold” in the world, this country is one of the poorest Nations on the planet. According to forecasts of the International monetary Fund by the end of this year, inflation in Venezuela will exceed 700%. The official data is smaller, but also impressive 180%. The record established largely due to low commodity prices.

Venezuela is making every effort to keep the oil on the world market was valued as before. Maduro and other senior Venezuelan officials over the past year or two had a few trips to the countries — producers and consumers of “black gold”, trying to throw quotes to an acceptable level.

Until recently this was not possible. But in the early autumn of this year, apparently, some progress has been made. “The countries exporting oil, close to the conclusion of an agreement to raise prices in the market,” said Maduro. Interestingly, the statement was made after chatting with a colleagues from Ecuador and Iran in the framework of the non-aligned Movement summit, which recently took place in Caracas. Maduro explained that the progress in the negotiations with other OPEC countries and producing countries outside the cartel.

Perhaps Maduro flattering. But this time a high probability that he actually managed to find understanding from other market players. The important thing is that he was lucky to reach a compromise with Tehran that in order to restore its position in the world market, dumping, and sometimes exporting raw materials at a loss. Earlier, Iran promised to increase production to predicciones level of 4 million barrels a day. This limit has been reached. To grow, Iran is nowhere. So there is every reason to believe that the fall in the price of oil will not.

But grow can. Many of the largest miners, such as Saudi Arabia, Russia, Mexico and Norway, have already discussed the possibility of “freezing” of production at a certain level. If this decision will join Iran, you in 2017 quotes completely free to grow to $55-60 per barrel.

Moreover, the shale gas revolution in the US will not prevent to reach this corridor. After the collapse of oil prices, the number of drilling rigs in the U.S. decreased by more than 5 times. Despite the fact that their number is gradually increasing, production in the United States continues to decline. American producers, of course, this fact frustrates and other exporters, on the contrary, delighted. Including Russia. If the value of “black gold” will add to the current $46 another $10-15, then the domestic currency, it will be a good help. The dollar in this case can fix at around 60-65 rubles and no more to creep up. The state budget calculated in 2016 based on the price of a barrel of $50, at least in the coming year will be laid out without much deficit, and to squander the reserve funds we do not have.

The case remained for small — to agree on freezing the production of “black gold” in Algeria on 28 September, the International energy forum.


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