At tis point, the biggest event in the global oil market is the latest OPEC summit. This is believed to be the major reason why crude oil prices keep on going down. Well, it is hard to disprove this supposition since the price started instantly falling down after the OPEC announced its decision to remain its oil production unchanged at 30 million barrels a day. This took place during the latest summit in Vienna on November, 27th.
The Secretary General of the OPEC says that the OPEC’s decision isn’t aimed against other oil-exporting nations. There are rumors that the OPEC makes decisions in favor of the USA and shale oil production. But the OPEC members respond that these rumors has nothing to do with reality.
Masteforex-V Academy reminds you that despite all the statements made by the SG of the OPEC, oil prices went sharply down almost instantly after the OPEC’s decision was revealed. It is reported that the OPEC will have to gather an emergency summit only in 3 months after the price is down to $40/b.
All in all, the OPEC is a union of oil exporters embracing 12 members - 8 Middle Eastern and North African countries as well as Nigeria, Angola, Ecuador and Venezuela . Before dropping some 40% this year, oil prices used to be relatively stable for 5 years. Experts say, that the price decline accelerated after the 166th OPEC summit. At this point, the biggest losers suffering from the oil price collapse are Russia, Nigeria, Iran and Venezuela .
While, the situation is the oil market getting more uncertain and unstable, oil futures keep on setting new record lows. For instance, Brent oil futures reached the lowest level since July 2009. At the same time, most analysts assume that the current collapse of the Russian Ruble is a direct consequence of ultraslow oil prices. The January Brent and WTI futures dropped down in price to $62,93/b and $58,86/b respectively.
Meanwhile, Masterforex-V Academy experts remind you that the price of crude oil is currently fluctuating within a pretty wide range between $80 and $50 per barrel. At the same time, the cost of conventional oil production in the OPEC countries is $10 per barrel.
With that said, the OPEc members are likely to keep oil prices low for a rather long period of time - like 1-2 years. Under such circumstances, US producers of shale oil will simply abstain from entering the international market while the OPEC will strengthen its position in the global arena. And the most important thing about it is that these nations can easily do it without seriously harming their national economies.
Apparently, no OPEC member is going to reveal such plans. On the contrary they try to reassure the world that their actions aren’t aimed against any oil nation, including Russia, Iran and the USA. Still, these are just empty words since there is no other logical explanation of such decision under the circumstances when the excessive supply of oil is growing, thereby exerting downward pressure on oil prices.
The bottom line is that the current negative tendency seen in the market of crude oil is like to continue in the near future. Wit that said, the price may well go down to $40/b or even below this level. On top of that, such ultra-low oil prices may dominate the global market for months if not years.
