The unexpected crash in the global market of crude oil seen over the last few days has made the international community worried about the future of crude oil. Now, traders and investors are not the only ones worried. Financiers, economists, bankers, officials and many others are concerned about this since their financial well-being also depends on crude oil prices.
The next OPEP summit is scheduled for the end of May. For now, everyone’s interested how much crude oil will cost before and after the summit and how the cartel and other oil nations will react to this.
After the Vienna Accord was reached, oil prices managed to recover from $49/b in December 2016 all the way up to $56/b in March and April 2017. However, April happened to become the month when the bears took the lead and initiated another downtrend in the market of crude oil. Now it’s even one dollar cheaper than it used to be right before the agreement took effect.
Some experts warned that the Vienna Accord with its production cuts wouldn’t bring the desired effect since American shale oil companies would benefit from this and would make up for the cuts. This is exactly what happened.
At first, everyone seemed to be cheerful about the recovering balance in the international market of crude oil. The Saudi Arabian Minister of Oil predicted that the balance would recover by mid 2017. But the situation keeps on disproving this prediction. According to the OPEC stats, the global oversupply is now 900K b/d, which are roughly the same figures seen in early 2017. Some of the American shale oil produced over the period started being exported.
That’s why more and more international experts start seriously doubting the likelihood of extending the Vienna Accord. Why extend it if there has been no considerable progress so far? EverFX experts say that even today crude oil is overpriced and the prices are still holding this high only thanks to the agreement. But the market seems to be losing faith in the agreement as it’s getting closer to the end, with fewer chances to be extended.
