Crude price can reach $60/barrel in case major producers agree on oil deal


Russian Alpari Company’s Analytical Department expects oil prices on the global crude markets to reach $50-$60 a barrel by early summer 2016.
Department director Alexander Razuvayev told Trend that this price can be achieved if oil producing countries decide to freeze oil production at the level of January 11, 2016.

From 2010 until mid-2014, world oil prices had been fairly stable at the level of $110. However, the world crude market has recorded a sharp decrease since mid 2014, which negatively affected economies of oil producing countries.

Oil was sold at above $100 per barrel in June 2014, but an oversupply of oil due to the export of U.S. shale oil to the market and weaker demand following a slowdown in economic growth in China and Europe sent prices sharply lower in the second half of the year.

To recover from a supply glut, several OPEC and non-OPEC countries – Russia, Saudi Arabia, Qatar, and Venezuela held talks on the current oil market situation in the Qatari capital of Doha and agreed to freeze the oil output at January 11 level if other countries follows the deal.
To date, around 15 OPEC and non-OPEC producers, accounting for about 73 percent of global oil output, are supporting this initiative.
OPEC oil basket’s price stood at $36.36 per barrel on March 17, or $1.86 more than on March 16.

The OPEC and non-OPEC countries are expected to hold another meeting in mid-April in Doha, Qatar, to discuss the possibility of freezing oil output.
However, at a time when the world oil market is grappling with a global supply glut Iran announced that it is ready to increase exports by 500,000 barrels per day, and is likely to realize this goal to win back its shares in the world market.

Razuvayev, commenting on the issue of increasing duties on oil by Russia, said that this step is a usual procedure.
The duty on oil export from Russia will increase by $15.4 to $54.9 per ton starting from April 1 (compared to $39.5 per ton in March), the Russian Finance Ministry reported earlier.

The ministry also said the average price for Urals crude oil for the monitoring period from February 15 to March 14, 2016 amounted to $33.38 per barrel, or $243.7 per ton.

“The increase of duties on oil by Russia is a normal procedure,” Razuvayev said. “Duties depend on oil prices, pegging to oil prices is common practice.”

He also said that this measure will not lead to higher prices for gasoline in Russia, adding that this is a simple replenishment of budget.

Source: AzerNews

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