Oil prices: why OPEC-plus goes negative again
These days in Vienna, in an atmosphere of not the closest, one might say, on-duty attention from the media, another series of meetings is being held under the auspices of OPEC. Oil managed to rise in price by at least four percent even before October 5, the day when key decisions were made.
Nevertheless, the feeling does not leave that when gas passions flare up more and more, the cartel, one might say, was expected to be in the shadows. And this, despite the fact that the sanctions' games with Russian oil prices remain on the agenda.
However, few people now have doubts that OPEC, even if it does not advertise it, will try to put on the brakes the very idea of regulating hydrocarbon prices by "outsiders". After all, prices were once released not for someone to manipulate them.
It is impossible not to recall that the mechanisms of the notorious OPEC-plus deal provide for the unanimity of its participants, including non-members of the cartel. Interestingly, at the same time, statements have already been made in Vienna, such as "Russia will still regret not joining OPEC."
But this is only from the lips of fellow journalists. However, there are those, and not only in the press, who regularly recall the two-year-old oil war between Moscow and Riyadh. However, as you know, it ended with just a successful resuscitation of still dock-like agreements.
At the same time, in the OPEC oil cartel, expanded, very conditionally, under a plus deal, not one of the defendants even stutters about pre-war agreements and prices. And this is understandable - the special operation still does not have any tangible impact on the oil market.
Of course, it could potentially, and in the future it may well, if the NMD develops not into an ATO - an anti-terrorist operation, which would be absolutely true), but into a large-scale war. Who is interested in the latest scenario? It seems that no one, no matter how much you say about the "hand of Washington" and the intrigues of the CIA and Mi-6.
Just a couple of years later
The pause in face-to-face meetings between members of the OPEC+ agreement dragged on for two years. It turns out that covid is indeed worse than war. However, it should be so - fuel is in demand not only by the warring parties, but also by those who are behind them.
However, OPEC + is already actively analyzing the possible consequences of reducing oil production by 500 thousand - 1 million barrels per day. By October 2, the information leaked to the press - specifically to the Financial Times, and three days before the main summit in Vienna, something will have to be done about it.
The position of Saudi Arabia is understandable - it urgently needs at least some kind of reserve in case of an unexpected surge in demand. And it is quite possible if the events in Ukraine take a really sharp turn. Then there will simply be no extra Russian oil, and by and large there will be no one to close the embrasure.
On the other hand, it cannot be ruled out that in December the EU embargo on Russian oil will come into force. And with this scenario, the terrorist attacks on the Nord Streams somehow very clearly fit. Isn't that why Russia is going to Vienna with an unequivocal position - "for a general reduction in production."
After all, it is already known that the revenues of the Russian budget from the sale of oil, as well as gas, have fallen markedly in recent months. Buyers shamelessly use this, knocking out, and without much difficulty, not to say unprecedented - it happened worse, but very serious discounts.
The million barrels per day mentioned on the eve of Vienna 2022 is the largest reduction in production since the spring of 2020 - the beginning of the pandemic. Oil producers simply do not have faith that the economy will not fall into recession. Moreover, the world's central banks are shamelessly tightening their monetary policy.
It seems that it is not with us, but they really "have no money." And even 300 stolen Russian billions do not help. In the US, prices are rising, so are bank rates. And it is not so much ordinary Americans who are paying for this - a gallon of gasoline there is no longer more expensive, even cheaper, than developing countries.
OPEC is trying to be proactive, preempting everything it can, especially with the support of the participants in a positive deal. Well-known industry expert, analyst at the research company Kpler Victor Katona believes that “only OPEC+ can wake up oil prices from their current slumber”.
Give me a million, give me a million
As a matter of fact, OPEC is simply being forced to become like Panikovsky - the “great blind man”. And for the sake of maintaining the oil market, oil producers can do anything. And it is unlikely that there is now at least someone against high oil prices.
More than two years ago, things were different. And one could even say that excess oil revenues are a bigger headache than falling profits. But then, after all, the pandemic and the global crisis, and even more so the threat of a third world war, were considered almost the fantasies of experts.
Now few people will remember this, and the decline in production levels due to fear of a recession is no longer a forecast, but a reality. The recession itself is also a reality, only slightly disguised by the reports of financial structures. But these people will always be able to draw what they need.
With oil, this is unlikely to work - they do not count virtual dollars, but real barrels. Small, no matter what happens there, and not at all necessary - the “victorious” war, by and large, does not solve anything. The notorious warming up of military production by no means guarantees a warming up of the economy as a whole.
Today, global capital has clearly found itself in a dead end, and betting only on money, as the best regulator of everything and everything, does not justify itself. However, someone really doesn’t want to bet on something real, the same Trump was simply “gobbled up” for this. But he and the Republicans may well return.
But is the mighty American economy ready for their return? The economy of services and financial speculation, where the share of the real sector has already fallen to the critical “below 20 percent?”. Alas, there is no need to wait for an answer to this question in Vienna.
- Victor Malyshev, Dmitry Malyshev, Alexey Podymov
- static1-repo.aif.ru, universe-tss.su, petrotahlil.com
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