Deputy Prime Minister Arkady Dvorkovich said that the results of the agreements with OPEC to reduce oil production has not met the expectations of the Russian authorities. Moscow planned that the agreement will lead to growth of cost of oil to $60 per barrel. Experts believe that the Deputy Prime Minister is being disingenuous. The current price of “black gold” in General is not so bad. This is significantly more than forecasted in the Russian budget increased to $40. However, to sink to this level barrel can in a month or two
photo: Gennady Cherkasov
Sergey Agibalov, head of sector “Economy and Finance” of the Institute for energy and Finance: “most Likely, Arkady Dvorkovich disingenuous, saying that the results of agreements with the countries of the OPEC on reduction of oil production has not met the expectations of our leadership.
Just a month after the signing of the Memorandum between the cartel and other producers of raw materials the price of “black gold” has increased from $47 to $57. Naturally, in such a situation, the us oil company specializing in the production of shale oil and gas significantly increased its power. They were able to increase the profitability of their production, which previously due to the high cost of production of raw materials was actually negative. This did not allow the oil prices to strengthen to the level of $60.
However, what we are seeing now is acceptable. Strap $60 still would not have survived for long, shale producers of the US in this case, opened their wells even more and instantly knocked the price. So the current situation in the commodities market can be considered fair and natural.
But for how long oil will continue to maintain this price level, yet to make before. Negotiations between OPEC and other producers will continue in April and may. Closer to the summer, it will be decided whether it makes sense to extend the “freeze” of production. Not all members of the cartel agreed on the need for such solutions. However, the preconditions to ensure that the Memorandum on production cuts will be extended for at least six months, still remain.
In this case, there is reason to assume that the value of the Russian currency will remain relatively stable, and the dollar is not tipped the scales for a mark in 60 rubles. However, such optimistic sentiment can spoil geopolitical factors, similar to missile attack of the us military on Syria. If a similar situation will occur in the future, the economy of our country and, especially, the investment climate may undergo serious pressure, in consequence of which the American banknotes will take the bar in 62-64 exchange rate of the ruble.”
Mikhail Krutikhin, an orientalist, a partner with RusEnergy: “Initially it was clear that concluded at the end of last year, major players of the oil market, the agreement on the reduction of production of raw materials is bogus. Russia, though, claims that moving in this direction, in fact, is not fulfilling its obligations. The Ministry of energy has no effective levers of pressure on the domestic industry that is able to convince the oil companies to comply with the chosen course. Every Russian oil company to cut production at your own risk, not especially counting on the fact that these measures will bear fruit.
The same can be said about the representatives of OPEC. In the cartel can be traced to a situation close to complete chaos and confusion. All want to preserve their niche in the market. For example, Saudi Arabia, the biggest player in the global oil industry, is constantly offering discounts on their raw materials, what makes it more attractive. Many other members of the cartel act in the same way.
As a result, in one or two months oil prices run the risk of slipping from the current $55 to $40 per barrel and remain at this level until the end of the year. Therefore, the statement of the representatives of the Russian economic bloc on a high enough current prices for raw materials, clearly smacks of hypocrisy.”