Heroes of Ukraine

«Market Leader» - news and previews making you rich.

Thursday, 17 August 13:20 (GMT -05:00)



Stock and commodities markets

Unfavorable Prospects of Russian Oil Production


Despite a range of negative conditions, the Russian oil industry increased its oil production all the way up to another record in 2016. Still, a lot of experts assume that this tendency is likely to reverse in the near future. If that’s the case, the oil production volume in Russia will start dropping.

 

 

 

 
All in all, Russia produced 540 million barrels of crude oil in 2016. This was 11,2 million barrels of crude oil a day, or a new production record for Russia. Even relatively low oil prices didn’t prevent the local oil companies from producing that much oil. In the meantime, many experts predict that the Russian oil production is doomed to start shrinking in the coming months.
 
Yet, the experts’ predictions now seem to be starting to get real as they are confirmed by the stats coming from the corresponding Russian agencies. Any production and export cuts may become cause problems for the Russian economy. You see, for many years, oil export has been the bread and butter of the Russian economy, and that’s why the Russian government got used to it. Some high-ranking Russian politicians are still feeding the public with an excessive amount of anti-crisis optimism taken out of thin air.
 
On March 27, the Russian Minister of Natural Resources said that he was surprised with all those spookies you can find online and offline about the doomsday scenarios for the Russian oil industry. According to him, the government is still financing in the exploration and production of fossil fuels while innovating the related industries. He is sure that even in 30 years, Russia’s oil and natural gas fields will be plenty of resources to extract and export.
 
However, making long-term production forecasts is not something reliable. To prove it, let’s remember the recent U.S. shale boom. Up until the mid 2000s, many experts predicted the end of the oil era in the USA. But then the shale oil was discovered and they learned how to extract it, which made the experts revise their forecasts.
 
As for the current tendencies in the Russian oil industry, they are not that optimistic. Mining companies often overestimate the discovered oil fields. However, even the experts from Rosnedr calculated that it’s impossible to sustain the same level of oil production after 2020.
 
Officially, Russia is one of the leading countries in terms of oil reserves. At this point, Russia is said to have over 15 billion tons of crude oil. This means that Russia still can produce crude oil at the same level for the next 30 years. The thing is that more and more oil fields contain crude oil that’s hard to extract. At the current prices, extracting such oil is not a profitable business at best. At this point, most oil fields are at the stage of declining production.
 

 

Only new oil fields are seeing an increase in oil production. Even though some of the biggest Russian oil companies are still increasing their production, the overall tendency is already starting to show and over the next couple of years it is expected to become clearer.

 

You are free to discuss this article here:   forum for traders and investors

 

Add to blog
Got a question? – Ask it here »
 

Dow Jones Industrial Average Set New All-Time Record, Above 22K Points

The Dow Jones Industrial Average (DJIA) is reported to have set a new all-time record. For the first time in its history, the index has exceeded the 22K threshold.

 

 
For those of you who don’t know, the Dow Jones Industrial Average is one of the oldest and most significant indexes indicating the health of the American stock market. It was created by Charles Dow and Edward Jones. In 1889, Mr. Dow founded The Wall Street Journal, one of America’s first business editions. In 1896, The WSJ published the DJIA for the first time when analyzing the current state of the U.S. stock market for the first time. Back then, the DJIA was at 40,94 points, NordFX experts report.
Publication date: 04 August 06:09 AM

OPEC Increases Oil Production To Highest Volume Since Early 2017

The OPEC’s average daily level of oil production saw another high in June 2017. To be more specific, they produced 260K barrels a day more than in May 2017. The biggest gainers in term of oil production were Libya and Nigeria. Those are the OPEC members that didn’t sign the so-called Vienna Accord, which is why they are not obliged to freeze their oil production.

Publication date: 05 July 12:31 AM

Why Are OPEC and Russia Unable to Trigger Oil Price Rally?

Not so long ago, oil prices reached the 10-month low. Since early 2017, oil prices have already dropped by 20%. The low efficiency of the joint efforts to cap oil production in order to support oil prices is now rated differently by the international expert community.
 
Publication date: 01 July 12:57 PM

Crude Oil Plunges Below $45/b

Oil prices keep on going down. Yesterday, for the first time since November 2016, the price of Brent oil dropped below $45/b. to be more specific, later on the trading day, a barrel of Brent oil cost $44,63 in London (ICE Futures). This means that the price dropped by 3% over the trading day. A day before, the trading session ended up with $46,02/b, NordFX reports. This is the lowest price since November 15, 2016.

 

 
Publication date: 21 June 11:36 PM

Trading Week Starts with Oil Price Drop

On Monday, June 19, crude oil is getting cheaper worldwide. Experts say that the price drop has to do with the recent report on the amount of oil rigs in the United States. In particular, the report says that the amount of such rigs has grown over the last week.
 

 

Baker Hughes reported on June 16 that 6 new rigs had been activated over the reporting period, thereby setting a new major high – 767 units, which is the biggest amount of functioning oil rigs since April 2015. By the way, the amount of oil rigs has been continuously growing over the last 22 weeks, which is also the new 30-year record.
Publication date: 19 June 02:27 AM

Brent Drops Below $48/b Amid Qatar’s Paradox

The Qatar crisis failed to push oil prices higher as expected by those who had previously extended the so-called Vienna Accord. Yesterday, on June 7, the global market of crude oil got feverish. The reasons for that was all about the tensions around Qatar, which is an oil exporter from the Persian Gulf.
 
Publication date: 08 June 01:17 AM

Russia Wants Expensive Oil. Is It Really That Beneficial for the Russian Economy?

As you probably know, both Russia and Saudi Arabia are interested in lower oil supply in the global market since the deficit is expected to push oil prices higher, thereby resulting in bigger profits from their oil exports further down the road. That is why they seem to be doing their best to contribute to this ambitious goal.

Publication date: 06 June 11:06 AM

Russian Oil Production to Hit New All-Time High This Year, ACRA Experts Say

According to the experts working for Analytical Credit Rating Agency (ACRA) from Russia, the long-awaited extension of the so-called Vienna Accord signed by OPEC and some of their non-OPEC peers led by Russia may eventually result in higher oil prices along with eliminating the long-lasting oversupply in the global market of crude oil. This is what the experts stated in the recent report on the prospects of the Russian oil industry until 2021.
 
Publication date: 05 June 01:07 PM

Oil Prices Don’t Care About OPEC’s Decisions

As you probably know, last Thursday, OPEC and their non-OPEC fellow decided to extend the so-called Vienna Accord during the recent summit in the capital of Austria. The mentioned agreement implies cutting oil production in order to back higher oil prices in the near future. The agreement was extended for 9 months – until the end of March 2018.

 

 
Publication date: 01 June 04:09 AM

Russian Economy Will Face Challenges After 2018

It’s getting more and more obvious that crude oil is not going to grow as expected, which is why the hopes laid by the Kremlin on higher oil prices and higher income from oil exports are probably not going to become a reality. Most likely, this is not going to happen over the next couple of years as well. Despite extending the Vienna Accord during the recent OPEC summit, the participants of the summit still cannot see the expected results as oil prices still haven’t shown any considerable rally, thereby indicating no significant progress.

Publication date: 28 May 11:46 PM