the meeting of the Ministerial monitoring Committee of OPEC+ coordinated easing from August 1, restrictions on oil production. In accordance with the previously approved plan, the participants of the cartel from August 1, will increase its production by 2 million barrels a day. While the partners in an informal Alliance demonstrate goodwill to each other, but in the near future between them again could be a severe hostility, able to bring down the barrel to a minimum. Although Russia supported the easing of restrictions on production, low cost of energy will force the national government even deeper to get into the reserves of the state.
Another decision of the parties to the agreement OPEC+, the actual oil cartel, and the largest producing countries, adopted on 15 July, brought no surprises as for the producers of “black gold” and the largest consumers of hydrocarbons. Members of the Alliance since August, as planned and agreed to mitigate the constraints on oil production from 9.6 million to 7.7 million barrels per day. The total increase in the extraction of raw materials should be partially offset by reduced production in August and September in Iraq and Nigeria, which is very tentatively adhered to the extractive limits in previous months.
the Main production countries are not happy with this decision. When a similar decree on the reduction of production of “black gold” was taken by OPEC+ six months ago, the question of the extension of the restrictions for August was scrapped. Producing countries, primarily Saudi Arabia, offered as quickly as possible to get out of the energy isolation and tried to quickly restore the supply of hydrocarbons to the world market. In July, the Russian oil exports to Europe amounted to only 2.3 million tons, which was less than 40% of the volume, which was a month earlier. So little “black gold” on the main trading platforms of the Old world, our country is not sold in 2003.
Recall, the deal to reduce oil production OPEC+, concluded in early April amid an unprecedented collapse in demand due to pandemic COVID-19, suggests that in may-June to reduce production stood at 9.7 million barrels per day, up 23% from 2018. July was supposed to slightly relax the restrictions to 7.7 million barrels per day (18% of the total), and from the beginning of 2021 and 2022 to may and August to 5.7 million barrels a day (another 14% of the inventory database).
“After the decision of OPEC+ to increase the production by 2 million barrels a day oil prices fell to $42 per barrel. Because the market was ready for such a verdict, another figures from OPEC+ of traders are not surprised”, — considers the head of analytical Department AMarkets Artem Deev. Of course, the expert explains, all the manufacturers profitable to increase the production of oil, but in a situation of low demand for other tools for support quotes, in addition to reducing production, does not exist. Producing countries reduce production, lose income and that is not acceptable. In this regard, says Deev, OPEC+ runs the risk of collapse. “If not for the pandemic, the end of the Alliance would have happened already this year. Amid falling demand, competition between manufacturers will increase in the near future we are likely to see, as some market participants are gradually losing their positions, while others increase its share and increase the volumes of production,” – says the analyst.
as for oil prices in the short term, the majority of respondents “MK” experts believe that they will not fall below $30 and will not grow more than $40 per barrel. and no new agreements them from this range is not shifted.
