According to the Secretary General of the OPEC Abdallah el-Badri, oil prices are expected to stabilize next year. He views the current situation as a challenge for everyone. On top of that, the prices are expected to become balances and stable for longer-term perspective.
This is what he said during the meeting with the Russian delegation presided by the Russian Minister of Energy Alexander Novak in Moscow.
In his turn, the Russian Minister of Energy replied that the oil market is currently influenced by multiple geopolitical factors. In particular, he believes that the latest agreement reached between Iran and 6 negotiators will influence the global market of crude oil considerably since Iran is going to come back to the market as a major player. At the same time, he urged the OPEC to conduct wiser policies based on the understanding of various key factors influencing the market. He underlined that fact that both the OPEC and Russia pursue the same goals and are interested in keeping the oil market balanced and steady.
It is interesting to note that despite the overall negative influence of low oil prices on the Russian oil industry, Russia increased its oil production by 0,6% up to 526 million tons over the last 12 months. At the same time, oil investments increased by 10% over the same reporting period to reach 985,6 billion RUB.
It should also be noted that Mr. Novak sees nothing abnormal in the current volatility in the global market of crude oil. The fluctuation within the $50/b-$65/b range is an expected process.
As you probably know, earlier this month, oil prices resumed its downtrend backed by the expectations of higher oil supply as Iran is about to boost the supply, thereby increasing the imbalance. The monthly drop seen in July may well set a record since the start of the downtrend last summer.
At the same time, Dmitry Peskov, the Press Secretary of the Russian President, says that experts give contradictory forecasts for the short-term future of oil prices, which is why it is too premature to make specific conclusions. At this point, it is too difficult to say which forecasts are more likely to manifest themselves.
Meanwhile, Brent ICE futures for September delivery lost $0,24 or 0,45% of their value thereby dropping down to $53,6 per barrel while WTI futures for September delivery lost $0,27 or 0,56% of their value thereby dropping down to $47,71 per barrel. The bias is still bearish even though some experts expect a recovery.
