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Friday, 21 July 02:42 (GMT -05:00)



Stock and commodities markets

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.
 

 

 

 

In June 21, the prices dropped by 2% at a time. This brought them to the 10-month low, which came as a shock to most observers out there. After the OPEC and Russia agreed to extend the so-called Vienna Accord, most experts started predicting higher oil prices, but they have failed so far, as you can clearly see.
 
Apparently, the oil exporters were hoping for the same scenario that was previously seen a number of times in the past. The thing is, production cuts have always resulted in higher oil price, but not this time. Being encouraged by the optimism expressed by the oil exporters, many traders and investors started loading up on oil futures, but now they seem to have failed on their oil deals since the bias is now bearish despite the oil agreement extension.

 

 

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A couple of months after the initial agreement was signed, the participants found out that their oil inventories waiting to be exported were actually shrinking at a slower-than-expected pace. The demand for crude oil around the globe happened to be lagging behind their expectations as well. On top of that, American shale oil companies started behaving the way it was expected.
 
Small-scale American companies producing shale oil used to be on the verge of bankruptcy due to cheap Saudi oil exported in quite large amounts and over an extended period of time. However, the shale companies survived this and even revived as soon as oil prices started going up earlier this year. They unexpectedly started pumping more oil with the help of fewer oil rigs.
 

 

As a result, nobody can deny the shale oil phenomenon today. Yet, the impact seems to be serious. The thing is, despite the civil war in Yemen, the Qatar crisis, and the disputes between Russia and the USA over the situation in Syria, oil prices have still been going down over the last few weeks. The whole point is, previously any of those factors could have triggered an oil rally in an instance. But this is not happening now, and chances are the U.S. shale oil industry is currently one of the key drivers of the downtrend in the global market of crude oil. Of course, the downtrend can be partially explained by higher production in Libya, Brazil and some other oil-exporting countries. However, there is no denying the fact that the abundance of American shale oil and natural gas is the key factor pressing oil prices. For the first time in many decades, the USA has become a major oil exporter.

 

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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

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

IMF Demands Land Reform From Ukraine

Pension and land reforms are the two questions on the agenda, without resolving which the Ukrainian government can forget about further loans from the International Monetary Funds.

Publication date: 28 May 11:30 PM

Standard & Poor’s Confirms Ukraine’s Rating

International rating agency Standard & Poor’s (S&P) has confirmed the long-term rating of Ukraine, both for national and foreign currencies. The rating is confirmed at «В-/В», with stable forecast for both national and foreign currencies.
 
S&P analysts underline that confirming the ratings reflects the progress achieved in the macroeconomic situation in Ukraine. The Ukrainian GDP is expected to grow by 1,9% this year.
 
Publication date: 28 May 11:08 AM