Oil market condition: 2019 is the most difficult. However, there is a tendency to normalize
As is known, in December 2018, Italy’s key oil and gas company, Eni S.p.A., and Qatar Petroleum signed an agreement to reduce oil production. Thus, the countries joined the general agreement, in which the organization of the countries-exporters of oil (OPEC), as well as Russia and allies participate. These actions will help keep the price of black gold at $ 60 per barrel. It is expected that the average price of a barrel will not exceed $ 70. Representatives from Eni S.p.A. predict the cost of a barrel in the range of 60-62 dollars. At the same time, even pessimists point out stable demand for hydrocarbons with daily volumes of 1.4 billion barrels.
In December 2018, the cost of Brent crude oil fell first for a year and a half below fifty dollars per barrel. After that, however, quotes rose by an average of 20 percent. At the same time, the OPEC countries and the allies noticed progress in increasing the price of oil and stated that they were ready to reduce production further. At the same time, there has been a thaw in trade relations between China and the United States. All this was a good reason for the stabilized cost of a barrel of black gold. Many say that the US sanctions against Iran have become a stabilizing factor in the formation of prices at around $ 60. Many countries, supporting the United States, have changed the main supplier. However, not India, which decided to buy hydrocarbons for rupees. As a result of the sanctions, the Islamic Republic of Iran forcedly restricted oil production from 2.7 to 1 million barrels per day.
Oil market condition: US assistance from Russia
At the same time, representatives of Saudi Arabia are confident that the agreement on the reduction of oil production primarily plays into the hands of the owners of the US shale deposits. Recall – according to the results of the Vienna agreement of December 7, 2018, total oil production was reduced by 1.2 barrels per day. At the same time, the organization of manufacturing countries promised to cut the daily rate by 800 thousand barrels. Russia and other allied countries – by 400,000. At the same time, OPEC demonstrated its own initiative, reducing production by 600,000 barrels per day in December.
Relying on the reports of the United States Department of Energy, 2018 turned out to be a record in hydrocarbon production. Therefore, throughout the year from the subsoil in 24 hours. This is the maximum in history.
In mid-January, WTI futures cost just over $ 51 a barrel. The rise in prices from the first days of January 2019 was about 13%. When compared with the minima observed in December 2018, prices rose by 22%. Based on previous studies, experts say that for successful work, American shales need a price for oil above $ 54 a barrel. This is due to the rising cost of equipment and raw materials, as well as an increase in staff salaries.
In general, the entire oil industry approved with approval a decline in production and, as a result, a rise in the price per barrel of oil.
