Heroes of Ukraine

«Market Leader» - news and previews making you rich.

Monday, 21 May 16:20 (GMT -05:00)



Stock and commodities markets

OPEC and Russia Created a Dangerous Rival


Russian oil expert Ivan Priobrazhenskiy has commented on the negative outcome of curbing oil production (the OPEC+ deal). He claims that while trying to create an artificial deficit in the global oil market, the OPEC+ deal participants actually did American shale oil producers a huge favor. The thing is that American shale oil companies have been boosting their production over the last year or so, and they can take the United States to the status of the world’s biggest oil producer. They have already outpaced Saudi Arabia and are close to outpacing Russia, which is currently number one in the world in terms of crude oil production.
 
At the same time, America becoming the world’s leading oil producer is not something unreal anymore. By the way, this is exactly what the IEA predicts. Given the fact that the IEA is headquartered in France, we can say that the agency is equidistant from all the parties concerned. The local experts publish oil reports on a regular basis. The latest one reads that the American shale oil companies are going to boost their production in the near future.
 

 

Another production increase may trigger a price drop in the global oil market. In this case, lower oil prices will result from increasing oversupply, which is a natural outcome in such situations.
 

1fd505eaa9001f771e0fb42f51ef2861.jpg

The report reads that over the period of September through November, American shale oil companies increased their production by 846K b/d. So, they expect the United States to outperform Russia and become number one later this year.
 
At the same time, experts predict the global economy to accelerate its growth this and next year, which will definitely increase the global demand for crude oil. The IMF also expects the growth rate to be higher than expected. Based on the IMF’s report, the IEA increased their global demand growth forecast from 1,3 million b/d up to 1,4 million b/d. However, it’s interesting to note that last year, this rate happened to be slightly higher – 1,6 million b/d.
 
The OPEC+ deal stimulated higher shale oil production in the United States
 
In theory, this set of rules is supposed to trigger an oil rally, which is something that was planned by Russia and the OPEC when they were signing and then extending the so-called OPEC+ agreement designed to cap their oil production.
 
Indeed, the IEA reports that the participants’ oil inventories did actually drop dramatically ­– from 264 million barrels in December 2016 all the way down to 52 million barrels in December 2017. On the other hand, lower inventories and higher prices triggered another shale oil boom in the USA. Apparently, American shale oil got profitable again. The thing is, that shale oil production is relatively costly, which makes it unprofitable at low oil prices.
 
The bottom line is that Russia and the OPEC actually helped the American shale oil industry to rise again, thereby creating a serious rival. The shale oil production in the United States has been booming over the recent months. Experts report that the local shale oil companies altogether have already outperformed Saudi Arabia in terms of daily oil production and are now on their way to outpace Russia and become the world’s biggest oil producer.
 

 

NordFX experts report that Brent oil is currently trading at 65,6 dollars per barrel.m2us86v28gonsi3bjkxtsbcoj.png

 

 

You are free to discuss this article here:   forum for traders and investors

 

Add to blog
Got a question? – Ask it here »
 

Crude Oil Goes Above $80/b, Morgan Stanley Improves Oil Forecast

On Thursday, May 17th, Brent oil exceeded $80/b for the first time in 3,5 years. The last time the price reached this level was on November 25th, 2014.

Publication date: 17 May 11:20 AM

Oil Prices At $79/b, Russian Ruble Still Weak. Why?

On Tuesday, May 15th, Brent oil reached $79/b. Strange as it may seem, the Russian Ruble hasn’t reacted to this so far, even though this always has been a positive sign for Russia’s national economy and currency heavily reliant on crude oil prices. Moreover, the currency has been going slightly down for a while despite being backed by higher oil prices.

Publication date: 15 May 01:19 PM

Russia Isn’t Interested In OPEC+ Anymore

Right in advanced of the forthcoming OPEC+ summit some experts doubt that Russia is still interested in the agreement. The strategic objectives of the OPEC+ deal are almost reached. The imbalance in the global oil market has almost been eliminated. The cost of a barrel of Brent oil has increased by more than 100% since late 2016. At this point Brent oil is trading above 70 dollars per barrel. On Q1 2018, the OPEC made 400 million dollars a day more than 12 months before.

Publication date: 28 April 07:57 AM

Who Loses and Wins from Oil Prices At $70/b?

High oil prices have two sides of one coin. On the one hand, while oil producers are  benefiting from today’s oil prices over $70/b, this seems to be  creating an extra pain for oil consumers worldwide. What exactly has been happening to oil-producing economies?

Publication date: 28 April 06:10 AM

American Oil Export to Europe Quadruples Thanks to OPEC+

As predicted by many experts, the OPEC+ agreement has been favoring American shale oil producers. The export of American oil to Europe has quadrupled. The thing is that the agreement between the OPEC and Russia-led non-OPEC oil producers pushed oil prices high enough to make American shale oil production profitable again.

Publication date: 26 April 05:26 AM

Russian Oil Production Is About To Peak and Start Declining in the Near Future

According to Finanz, with reference to the International Energy Agency, Russia has been benefitting from its oil production and export for decades. However, this is about to change in the future since the Russian oil industry is about to see its production peak, which means it will inevitably start going down further down the road.

Publication date: 16 April 05:31 AM

US-China Trade War Drops Oil Prices

The trade war between the United States and China is underway. Yet, it has already led to some consequences. For example, international experts say that this war has been the reason for the current weakness of the global market of cryptocurrencies. At the same times, Finanz experts claim that this trade war has dropped oil prices.

Publication date: 06 April 01:09 PM

USA Almost Doubles Oil Export in 2017

In 2017, the United States’ oil export reached 1,1 million barrels on average, which is almost twice as much as exported in 2016. These figures are confirmed by the EIA.

Publication date: 30 March 12:49 AM

OPEC+ Conditions May Get Tougher

The participants of the OPEC+ deal have recently discussed the efficiency of the deal. Having discussed the results, they decided to change a range of criteria. To do so, they may well have to extend the OPEC+ deal, Bloomberg reports.

Publication date: 28 March 08:46 AM

Что будет с золотом в марте?

What should we expect in the global market of gold in March? Some experts decided to share their forecast.

Publication date: 21 March 03:38 AM