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Saturday, 24 February 17:33 (GMT -05:00)



Stock and commodities markets

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.
 

 

 

 

What is really going on in the global market of crude oil?
 
For now, 24 oil producers from around the world agreed to extend their production cuts for the next 9 months during the recent OPEC summit in Vienna. Against low demand, cutting production may look a reasonable solution designed to balance the market. On the one hand, this may well support the prices. On the other hand, there is no need to extract crude oil from old oil fields with excessively high production costs.
 
First of all, it’s OPEC nations who are busy regulating the oil production in the first place. Russia is not an OPEC member but has been an OPEC ally over the last few months. Yet, experts say this cooperation isn’t something that Russia can benefit from at all times. It’s high production costs that prevent Russia from making plenty of money from exporting crude oil. So, the only thing left for Russian oil companies is to expand the profits at the expense of expanding the volume. However, as you probably know, Russia promised to make the local oil companies cut their oil production by as much as 300K barrels a day. This is at least 15 million dollars of lost profit a day.
 

 

Even though any production cuts in the global market of crude oil are temporary, they still help the world’s major oil producers and exporters to sustain slightly higher prices at least temporarily. Shortly after the participants of the recent OPEC summit decided to extend the agreement, oil prices went slightly up. However, we haven’t seen a major price rally since then.

 

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Is crude oil really expensive today?

Oil expert Sergei Shelin decided to share with us his thoughts on the processes currently going on in the global oil market. In particular he thinks that crude oil has been struggling to consolidate around 70 dollars per barrel but the thing is that even the world's biggest oil producers and exporters don't believe in high oil prices in the future.


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Three Big Questions Related to Oil Prices

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Publication date: 23 January 05:44 AM

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Publication date: 16 January 11:46 AM

Brent Oil Is Getting Closer to $70/b, Provoking a Shale Storm

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Publication date: 11 January 11:59 AM

OPEC Nations Don’t Want $60/b

The OPEC doesn't seem to be interested in oil prices above $60/b. At least this is what the Iranian Minister of Oil said the other day. By the way, Iran is the OPEC’s third-biggest producer of crude oil.

Publication date: 10 January 03:45 AM

Investment Banks Make Controversial Oil Forecast for 2018

After the OPEC+ deal was extended not so long ago, several investment banks changed their predictions for the global oil prices in 2018. Bloomberg tried to compile those prediction into a single article. 

Publication date: 02 January 11:44 AM

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As promised, the CBOE launched the world's first Bitcoin futures on December 10th at 15 p.m. Central Standard Time (CST). The first BTC futures trading session started at 15000 USD/BTC. Within the first couple of minutes, there were 150 transactions processed. Over the first 20 minutes, the exchange rate increased up to 15940 USD/BTC. Lateronitwenttemporarilyupto 16600 USD/BTC.

Publication date: 11 December 02:26 AM

American Shale Oil Producers Enjoy OPEC+ Deal Extension

On the last day of November, the OPEC and several non-OPEC oil exporters met in Vienna to discuss the future of the global oil market during the OPEC summit. The summit ended with extending the OPEC+ deal until the end of 2018. Experts say this decision means the OPEC+ participants have lost the long-term oil war with American shale oil companies.

Publication date: 03 December 11:03 PM

OPEC Is Worried About U.S. Shale Oil Production Prospects

The OPEC is concerned that their American rivals producing shale oil may catch at the chance given them by the OPEC+ deal. The deal is aimed to cap oil production and restore the market balance in favor of higher oil prices. The OPEC+ agreement is likely to be extended during the forthcoming OPEC summit on November 30th in Vienna, Austria.

 
Publication date: 29 November 11:49 AM