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Thursday, October 27, 2016

The price of oil raised not Putin and OPEC, and robots

The battle for oil prices which we will see next year, has entered a decisive phase. After the informal meeting of OPEC in Algeria was reported that the cartel has decided to go for a restriction of output in the range of 32.5–33 million barrels of oil per day. This is a million less than is produced today. Thanks to this insider at the equator of the week “black gold” has risen just 6%, although officially “freezing production should be made only at the Ministerial meeting on 30 November in Vienna. Which, by the way, can take part and Russia. However, the increase was short-lived: already on Thursday, when analysts did not really have time to discuss the optimistic news, the oil weakened again to $47-48,5 depending on the exchange. Who’s digging into hydrocarbons? This “MK” asked the leading expert on hydrocarbon markets Mikhail KRUTIKHIN.

photo: Gennady Cherkasov

November 30 should be clarified not only the absolute figures for production, but each country cartel will put the signature under its self-restraint on extraction of minerals. The biggest hit yet ready to take Saudi Arabia: it promises to give from 0.5 million barrels per day in females. However, the poorest countries of the cartel — Libya and Nigeria, are actually in the mode of civil war and economic collapse, I hope that they will make an exception. And economically powerful Iran just doesn’t want to play by the General rules of the cartel and reduce production. On the contrary, he plans to build nearly the same number, in which the Arabian sheikhs will limit yourself. And why would the Saudis to sacrifice themselves? Unpredictable behaves and Russia. Vladimir Putin hopes that an agreement to reduce production will be reached within OPEC and between the cartel and our country. At the same time, our mining industry regularly reports on the daily production record in history.

The ins and outs of these contradictions explains the expert.

On the market there was a verbal intervention, which has short-term effect, — said the “MK” Mikhail KRUTIKHIN. We can see the real result, when someone starts to limit production or increase demand. While we are on the market didn’t see. What happened? Do the members of OPEC agreed in late November to talk about it. More no real step is not done. But then happened the following. In news agencies on Wednesday did not appear relevant until the actual news about this title. Agreed.” As is well known in the market securities, derivatives and futures, about 75% of transactions are performed by robots. Mechanical, with elements of artificial intelligence at work with the control words. Robots was identified by the news and acted in accordance with it. Without human intervention, oil flew up, following the General trend. Then this trend is checked and everything fell into place.

There is another technology short take — off- fall. The Minister of one of the countries of the cartel came out of the meeting room, dialed the phone of the London trader, of which we do not know, and said, “Quickly buy and sell”. Well, all someone has earned. I note parenthetically that the market went up 15 minutes before the Agency released its not until the end of reliable news.

— The real deal on limiting production possible?

Even if the cartel in late November will adopt a Declaration and even if there are specific numbers to limit production to one of these numbers to follow will not be as for many years no one not in compliance with any quotas.

— How can you comment on Russia’s behavior in “our common with OPEC for limiting the production?

Sequence no. Energy Minister Alexander Novak all the time proudly reported the scores, but then he says that we ought to stop these records to beat. And then remember that Russia may not restrict the production of oil artificially, because we have the oil industry lives in a market economy, and each oil company conducts themselves. Here command methods to stop the production impossible.

— What is your forecast for oil prices?

— She will long remain in the range of $40-50 per barrel.


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