the Principal terms reflected in the pre-new deal OPEC+, as follows. Saudi Arabia and Russia cut oil production to 2.5 million barrels per day each. The agreement provides that their daily level of production of “black gold” will be 8.5 million “barrels”. Moscow and Riyadh have gone on the big concessions. Collectively OPEC+ for may-June production will decrease by 10 million barrels a day. Then from July through December, the total volume reduction will fall to 8 million barrels per day, and from January until the end of 2021 April 2022 —up to 6 million.
the Compromise of 22 countries that participated in the negotiation process, found not at once. After a nine-hour negotiations, their members, sort of shook hands and agreed on volumes of production cuts, however, have met resistance from Mexico, need to reduce the imposed limit from 400 thousand to 100 thousand barrels per day. The deal was on the verge of collapse. However, to help the neighbor on the continent came to Washington.
the United States agreed to cut its production by another 250 thousand “barrels”, taking on walshaw part of Mexican cuts. Experts do not exclude that the wide pole USA is a figment of phone conversations between the two presidents and the Saudi king.
Independent experts assess possible future outcomes of the agreement. “The more countries will be able to negotiate, the stronger the positive effect on the oil market. In this respect, Mexico’s accession is beneficial for all countries. If the agreement is executed, then the oil price may return to level of $35-45 per barrel”, — said the head of the Luxembourg office of the consulting group KRK Group Nikita Ryabinin.
the head of IAC “Alpari” Alexander Razuvaeva more positive Outlook to the end of the year, a barrel of Brent could reach $50. However, as pointed out by the expert, the parties will have to really implement the agreement, and not to be formal members. “The control mechanism and, most importantly, sanctions for non-implementation OPEC+ no. In years past the cartel countries has often neglected its own promises, exceeding production quotas. The result was a sharp collapse of prices for oil” — warns an expert.
“If the agreement falls through or fails to execute it, then in a negative scenario the oil market can expect a pullback to $20-25” — draws the unpleasant prospect of Ryabinin. At the same time, experts already calculate the next steps the parties to the transaction.
“Despite the decline in production at 10 million barrels, in the world is the “extra” oil in the amount of 10-15 million “barrels”. Soon raw materials will be nowhere to go: the storage and tankers will be filled within one month. So without further radical solutions are not enough. Or it will be an even greater reduction in production, or even abandonment of wells. In Saudi Arabia there are no such problems. In turn, the us shale production is also much more flexible and allows to reduce production without much damage. In Russia, however, sealed wells covered with paraffin or freeze. Our oil production requires to recover a lot more time and money,” — said the head of analytical Department Amarkets Artem Deev.
“From the OPEC decision+ is perhaps the biggest negative has to feel Russia. Attributable to her decline by about 2.5 million barrels nearly half of the total oil exports of the country. Huge losses for the budget and the economy as a whole. Not to mention the fact that the technical reduction of production at the fields is costly. So questions about what price was agreed to a deal and get it from our country substantial benefits, remain open”, — said the chief analyst of Teletrade mark Goikhman.
Read also: the United States saved a deal OPEC+
