Oil, Sechin, OPEC and November 27
The next OPEC summit is near. Conspiracyologists again rushed to talk about the theories of the oil plot, the machinations of the White House against Putin and Sechin, the collusion of the Americans with the Saudis and the impending collapse of the world oil market almost to zero - let the black gold get to everyone for free, if only Russia collapsed. Meanwhile, Igor Sechin, as analysts suggest, is thinking about speaking at the OPEC summit.
Recall that blogs and the press are multiplying guesses of amateurs and analysts about some behind-the-scenes reasons for the fall in oil prices.
The two main points of view, which we have already written on the "VO", are as follows.
The Saudis decided to destroy the oil industry of non-fraternal America: Washington, with its oil shale revolution and the threat of flooding the world with oil, was pretty tired of Riyadh. And Riyadh decided to find opposition - to bring down the world price of oil to the bar below which the profitability of shale oil would be negative. The bar is approximately 80 dollars per barrel or lower. 70 dollars - guaranteed death for shale oil business. At these numbers converge American market analysts and experts in oil production. At a price of seventy dollars per barrel or a little higher production will be curtailed, companies in the mining states will throw people on the streets, and Obama's rating will be compared with the rating of his European counterpart Hollande.
This conspiracy hypothesis does not hold water.
Saudi Arabia has long been a regional American ally. Since the seventies of the last century, the United States undertook to ensure the safety of the Saudis. Riyadh, in turn, pledged to sell crude oil exclusively for US dollars. And this has been going on for over forty years. Undoubtedly, it will continue to go further, since the United States does not intend to abandon oil imports - however, the volumes will be smaller than the previous ones. Oil, after all, is a non-renewable resource, and Washington is thinking about national security.
In addition, Riyadh would not risk openly speaking out against the "world hegemon." In the sense of objections to the White House, the kingdom is capable only of small scandals (in the spirit of the dismissed just because of the scandal with the rejection of American politics by Prince Bandar bin Sultan).
The second hypothesis is based on a fantastic statement about the Saudis collusion with the Americans. The reason for the collusion is to bring down the price of oil to loosen the Russian economy. Russian sanctions turned out to be little, the Crimea will not be returned to Ukraine, which means that it is necessary to kill Russians with something. Now Russia lives mainly on the export of energy, therefore, the oil pipeline will be correct.
But this version does not hold water.
"Speaking" in a similar way with the Americans, the Saudis, together with those Americans, will not only harm their budgets, but also destroy the american oil industry. Yes, Sechin will have a hard time in Russia, but Obama’s Republicans, who are now fully in charge of Congress, will raise their stake.
The price of seventy dollars per barrel, by the way, is taken by conspiracy therapists not from scratch. She was voiced this month by OPEC representatives.
In early November, some of the officials representing members of the Organization of Petroleum Exporting Countries met informally in Vienna on the eve of the OPEC meeting scheduled for November 27. They discussed the price of oil, which reached the lowest level, at least in the last four years. At the meeting, it was openly stated that the cartel was unlikely to act now, when the prices for Brent oil were established in the 80 area of dollars per barrel. However, lowering the price to $ 70 per barrel will serve as a signal for action.
Already from this it is clear that the Saudis were not going to play against the USA. And in general, the Gulf monarchies are accustomed to living at oil prices of a hundred dollars a barrel, and when the market deprives the rich of a fifth of their income, their left heels start to twitch nervously.
Hence, the scheduled meeting of representatives of OPEC countries. By the way, in the coming days, not only it will pass.
In the twentieth of November, two meetings are scheduled: the International Conference on the Development of the World Oil Market (November 25) and the OPEC Summit (November 27). The first event was supposed to take place on November 21 in Caracas, but was moved on the initiative of Venezuela to Vienna on November 25. In the same place, in Vienna, the summit of OPEC will take place two days later. The connection of the transfer of the place and date of the first conference with this summit is quite obvious.
As the RBC With reference to Reuters, 25 November, Rosneft President Igor Sechin will take part in the International Conference on the Development of the World Oil Market. The conference was moved from Caracas to Vienna on the initiative of Venezuela.
The conference was postponed by the Rosneft press service: “At the initiative of the Venezuelan side, the International Conference on the development of the global oil market is being transferred from 21 to November 25 2014, and is expected to take place in Vienna on the eve of the OPEC summit in the capital Austria 27 November 2014 of the Year. "
In addition, Reuters reported that information about Sechin’s visit to Vienna gave rise to rumors about a planned meeting of the president of the energy state corporation with OPEC representatives.
It clarifies RIA News", Igor Sechin and Rafael Ramirez, head of the Venezuelan foreign affairs agency, at a meeting in Moscow discussed the prospects for the development of new projects. This was informed by the press service of "Rosneft".
"The meeting discussed a wide range of issues of current cooperation and the work of Rosneft in Venezuela, as well as prospects for the development of new projects," the report says.
Mr. Sechin congratulated Ramirez on his appointment as Vice-President and Minister of Foreign Affairs, and also expressed the hope that this would "give a new impetus to the relations between Russia and Venezuela in the energy sector, and would contribute to the effective development of joint projects."
RIA "News"Indicates that in July Venezuela signed a number of documents with Rosneft with the goal of creating a joint venture Petroviktoria and starting the implementation of the Carabobo-2 project, as well as creating a joint venture for drilling and services, a joint venture for the construction and engineering projects.
Recall that Venezuela is one of the OPEC countries. In addition to Venezuela, the cartel includes more 11 states: Iran, Iraq, Kuwait, Saudi Arabia, Qatar, Libya, the United Arab Emirates, Algeria, Nigeria, Ecuador, Angola.
Russia has an observer status in OPEC (since 1998).
With regard to the fall in oil prices on the world market, which are very concerned about both conspiracy therapists and oil traders - from Saudis to Russians - there are a number of objective reasons for this.
In addition to psychological expectations, often unnerving the oil market, speculators on the stock exchanges, forecasts of China's economic growth and energy appetites, predictions of European analysts about the impending decline in oil purchases by Germany, and finally shale oil production in the United States influence the price of a barrel. The increased sales of oil by Iraq, Iran and a little Libya also have an impact on the market. Ignoring these factors, trying to find a “conspiracy” track everywhere, is simply ridiculous.
Oleg Obukhov (RIA News") notes that one of the determining factors today is the very "incomprehensible" behavior of OPEC. The organization "can not decide in any way whether or not to reduce the volume of black gold mining." Therefore, the global market is nervous, and traders are playing short.
The analyst believes that the Vienna summit may be the starting point from which the rise in oil prices will begin. If the alliance announces 27 on November of a reduction in oil production, quotes may go up. At least that's what market experts say.
Vladimir Feigin, President of the Institute of Energy and Finance, told a journalist about the scenario in the market:
The key factor of the “price peak” can be considered the weak macroeconomic dynamics in the world. China’s economy alone will not pull out global demand for hydrocarbons. Oil analyst Sergei Agibalov told RIA Novosti:
As a result, analysts and market players are waiting for action from OPEC to stabilize the market.
But, let's add to this, representatives of the cartel, as already seen from the preliminary meeting in Vienna, are not going to do anything until the price drops to the mark of 70 dollars per barrel. To some extent, a cartel of unusual behavior itself provokes panic in the market, forcing traders to play short, and conspiracy theologians to invent absurd theories about geopolitical collusion.
From the summit of November 27, however, we should expect a certain decision. It will appear, despite the known differences within the countries of the cartel. Otherwise (and OPEC representatives understand this perfectly), the oil market will start to be in a fever - only because the organization did not come to an agreement and did not limit the fall in prices through the usual reduction in production volumes.
It would be interesting to listen and what will say at the summit of Sechin. If he, of course, appears there and if his words fall into the ears of journalists.
Recall that blogs and the press are multiplying guesses of amateurs and analysts about some behind-the-scenes reasons for the fall in oil prices.
The two main points of view, which we have already written on the "VO", are as follows.
The Saudis decided to destroy the oil industry of non-fraternal America: Washington, with its oil shale revolution and the threat of flooding the world with oil, was pretty tired of Riyadh. And Riyadh decided to find opposition - to bring down the world price of oil to the bar below which the profitability of shale oil would be negative. The bar is approximately 80 dollars per barrel or lower. 70 dollars - guaranteed death for shale oil business. At these numbers converge American market analysts and experts in oil production. At a price of seventy dollars per barrel or a little higher production will be curtailed, companies in the mining states will throw people on the streets, and Obama's rating will be compared with the rating of his European counterpart Hollande.
This conspiracy hypothesis does not hold water.
Saudi Arabia has long been a regional American ally. Since the seventies of the last century, the United States undertook to ensure the safety of the Saudis. Riyadh, in turn, pledged to sell crude oil exclusively for US dollars. And this has been going on for over forty years. Undoubtedly, it will continue to go further, since the United States does not intend to abandon oil imports - however, the volumes will be smaller than the previous ones. Oil, after all, is a non-renewable resource, and Washington is thinking about national security.
In addition, Riyadh would not risk openly speaking out against the "world hegemon." In the sense of objections to the White House, the kingdom is capable only of small scandals (in the spirit of the dismissed just because of the scandal with the rejection of American politics by Prince Bandar bin Sultan).
The second hypothesis is based on a fantastic statement about the Saudis collusion with the Americans. The reason for the collusion is to bring down the price of oil to loosen the Russian economy. Russian sanctions turned out to be little, the Crimea will not be returned to Ukraine, which means that it is necessary to kill Russians with something. Now Russia lives mainly on the export of energy, therefore, the oil pipeline will be correct.
But this version does not hold water.
"Speaking" in a similar way with the Americans, the Saudis, together with those Americans, will not only harm their budgets, but also destroy the american oil industry. Yes, Sechin will have a hard time in Russia, but Obama’s Republicans, who are now fully in charge of Congress, will raise their stake.
The price of seventy dollars per barrel, by the way, is taken by conspiracy therapists not from scratch. She was voiced this month by OPEC representatives.
In early November, some of the officials representing members of the Organization of Petroleum Exporting Countries met informally in Vienna on the eve of the OPEC meeting scheduled for November 27. They discussed the price of oil, which reached the lowest level, at least in the last four years. At the meeting, it was openly stated that the cartel was unlikely to act now, when the prices for Brent oil were established in the 80 area of dollars per barrel. However, lowering the price to $ 70 per barrel will serve as a signal for action.
Already from this it is clear that the Saudis were not going to play against the USA. And in general, the Gulf monarchies are accustomed to living at oil prices of a hundred dollars a barrel, and when the market deprives the rich of a fifth of their income, their left heels start to twitch nervously.
Hence, the scheduled meeting of representatives of OPEC countries. By the way, in the coming days, not only it will pass.
In the twentieth of November, two meetings are scheduled: the International Conference on the Development of the World Oil Market (November 25) and the OPEC Summit (November 27). The first event was supposed to take place on November 21 in Caracas, but was moved on the initiative of Venezuela to Vienna on November 25. In the same place, in Vienna, the summit of OPEC will take place two days later. The connection of the transfer of the place and date of the first conference with this summit is quite obvious.
As the RBC With reference to Reuters, 25 November, Rosneft President Igor Sechin will take part in the International Conference on the Development of the World Oil Market. The conference was moved from Caracas to Vienna on the initiative of Venezuela.
The conference was postponed by the Rosneft press service: “At the initiative of the Venezuelan side, the International Conference on the development of the global oil market is being transferred from 21 to November 25 2014, and is expected to take place in Vienna on the eve of the OPEC summit in the capital Austria 27 November 2014 of the Year. "
In addition, Reuters reported that information about Sechin’s visit to Vienna gave rise to rumors about a planned meeting of the president of the energy state corporation with OPEC representatives.
It clarifies RIA News", Igor Sechin and Rafael Ramirez, head of the Venezuelan foreign affairs agency, at a meeting in Moscow discussed the prospects for the development of new projects. This was informed by the press service of "Rosneft".
"The meeting discussed a wide range of issues of current cooperation and the work of Rosneft in Venezuela, as well as prospects for the development of new projects," the report says.
Mr. Sechin congratulated Ramirez on his appointment as Vice-President and Minister of Foreign Affairs, and also expressed the hope that this would "give a new impetus to the relations between Russia and Venezuela in the energy sector, and would contribute to the effective development of joint projects."
RIA "News"Indicates that in July Venezuela signed a number of documents with Rosneft with the goal of creating a joint venture Petroviktoria and starting the implementation of the Carabobo-2 project, as well as creating a joint venture for drilling and services, a joint venture for the construction and engineering projects.
Recall that Venezuela is one of the OPEC countries. In addition to Venezuela, the cartel includes more 11 states: Iran, Iraq, Kuwait, Saudi Arabia, Qatar, Libya, the United Arab Emirates, Algeria, Nigeria, Ecuador, Angola.
Russia has an observer status in OPEC (since 1998).
With regard to the fall in oil prices on the world market, which are very concerned about both conspiracy therapists and oil traders - from Saudis to Russians - there are a number of objective reasons for this.
In addition to psychological expectations, often unnerving the oil market, speculators on the stock exchanges, forecasts of China's economic growth and energy appetites, predictions of European analysts about the impending decline in oil purchases by Germany, and finally shale oil production in the United States influence the price of a barrel. The increased sales of oil by Iraq, Iran and a little Libya also have an impact on the market. Ignoring these factors, trying to find a “conspiracy” track everywhere, is simply ridiculous.
Oleg Obukhov (RIA News") notes that one of the determining factors today is the very "incomprehensible" behavior of OPEC. The organization "can not decide in any way whether or not to reduce the volume of black gold mining." Therefore, the global market is nervous, and traders are playing short.
The analyst believes that the Vienna summit may be the starting point from which the rise in oil prices will begin. If the alliance announces 27 on November of a reduction in oil production, quotes may go up. At least that's what market experts say.
Vladimir Feigin, President of the Institute of Energy and Finance, told a journalist about the scenario in the market:
“China is normally increasing its consumption, the world economy is not going to stop next year. It is planned to increase production in the USA for the time being, but it very much depends on prices. That is, it turns out that the market does not notice some factors and reacts very strongly to others, mainly to expectations. Fundamental factors all say that the price should be above 90 dollars. Because there is a zone in which there is some balance of interests. And most producing countries understand how to work in it. This is not dangerous for consumer countries - it does not slow down the development of the world economy. This is a zone where sustainable development is possible, projects can be implemented. ”
The key factor of the “price peak” can be considered the weak macroeconomic dynamics in the world. China’s economy alone will not pull out global demand for hydrocarbons. Oil analyst Sergei Agibalov told RIA Novosti:
“Against the background of not very active global consumption growth, the supply grew quite actively. As due to an increase in oil production in the United States - a consequence of the ongoing shale revolution, and an increase in production in some OPEC countries. And the intersection of these factors against the background of general instability in the financial markets has led to the current situation. ”
As a result, analysts and market players are waiting for action from OPEC to stabilize the market.
But, let's add to this, representatives of the cartel, as already seen from the preliminary meeting in Vienna, are not going to do anything until the price drops to the mark of 70 dollars per barrel. To some extent, a cartel of unusual behavior itself provokes panic in the market, forcing traders to play short, and conspiracy theologians to invent absurd theories about geopolitical collusion.
From the summit of November 27, however, we should expect a certain decision. It will appear, despite the known differences within the countries of the cartel. Otherwise (and OPEC representatives understand this perfectly), the oil market will start to be in a fever - only because the organization did not come to an agreement and did not limit the fall in prices through the usual reduction in production volumes.
It would be interesting to listen and what will say at the summit of Sechin. If he, of course, appears there and if his words fall into the ears of journalists.
Observed and commented on Oleg Chuvakin
- especially for topwar.ru
- especially for topwar.ru
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