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Thursday, 17 August 13:11 (GMT -05:00)



Stock and commodities markets

Brent Oil Price May Drop Below $40/B in June


Oil prices have been following a bearish trend over the last few days. International experts believe that if the OPEC doesn’t extend the so-called Vienna Accord, the prices are likely to drop below 40 dollars per barrel in a matter of weeks, if not days.

 

 

 

 
According to EverFX, the decision is going to be made during the forthcoming OPEC summit scheduled for the end of May. The OPEC is expected to extend the agreement to sustain oil prices above 50 dollars per barrel. Some experts even think that the cartel may cut their oil production even further down.
 
We remind you that the previous oil-production-cut agreement was signed by the OPEC and some non-OPEC members including Russia. The agreement seems to have failed to fulfil their expectations since the prices have dropped by more than 20% over the last few weeks. If the participants refuse to extend the agreement this time, the prices may dive deeper down, most likely below 40 barrels per barrel. This may well happen this June.
 

 

Still, the participants are rumored to have been staying positive on the idea of extending the agreement this time. The initial agreement was signed in November 2016 and took effect in January 2017. It implied cutting the OPEC’s total production by 1.2 million barrels a day as opposed to the production level of October 2016. The non-OPEC participants of the deal announced their production cuts by 600K barrels, with Russia being responsible for 300K of it.
 

Who do OPEC members say on possible agreement extension?

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The production cut agreement expires on July 2017. Since oil prices have been going down over the last few weeks, international experts believe that the agreement is likely to extended. As mentioned, the final decision will be made during the forthcoming OPEC summit in Austria. The summit is scheduled for May 25, 2017.
 
The idea of extending the agreement is backed by the United Arab Emirates. They think that higher oil production in the USA doesn’t threaten the Vienna Accord. On top of that, the OPEC is expected to consider several scenarios regarding the Vienna Accord. The participants will vote for the best solution.
 
Another reason why the agreement has all chances to be extended is the fact that Saudi Arabia shares the UAE’s optimism and doesn’t mind extending the agreement as well. For those of you who don’t know, Saudi Arabia is the OPEC’s unofficial leader, which is why any idea supported by Saudi Arabia has more chances to be supported by other OPEC members. Kuwait and Brunei are also on the list of those who support the idea of extending the Vienna Accord at least for the restoof 2017.
 
As for Russia, their position is still unclear, though Russia seems to share the OPEC’s opinion that the global market needs rebalancing and is likely to back the agreement extension.
 

 

American shale oil companies affect the market.
 

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As of May 10, 2017, Brent oil stayed close to 50 dollars per barrel. Analysts say that the prices managed to regain a bit of the lost ground after the announcement that the key oil market players were going to cut their supplies to Asia. However, they don’t believe that the news will manage to bring prices back above the 50-dollar threshold to let them stay there and move higher to 55 and 60 dollars per barrel, especially amid the EIA’s predictions that America’s oil production may turn out to be higher – 9,3 million barrels a day instead of 9,2 million b/d. In 2018, it is expected to reach 10 million b/d. If that’s the case, that will extern downward pressure on oil prices. That’s why some other experts believe that the U.S. shale oil production is something that won’t let the OPEC and Russia succeed in backing higher oil prices by extending the Vienna Accord.

 

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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