OPEC Summit: pricing jokes
Home news of the day - the outcome of the OPEC summit ended in Vienna. As soon as the cartel announced that it was maintaining quotas for oil production, the price of black gold on the exchanges flew down. American shale workers sprinkled ashes on their heads. At the meeting in Vienna, the Arabs smiled and even joked. It seems that the conspiracy therapists were right, and now the Saudis will fill the world, not the Americans.
Before the meeting in Vienna, the Minister of Petroleum of Kuwait, Ali Saleh al-Omayr, made a curious statement that the OPEC countries would accept any price for oil, at least 60 dollars per barrel. Following his words, Brent crude prices fell below 76 dollars per barrel.
Then the 166 conference of the cartel began, a detailed chronicle of which gives TASS.
Among the key statements are the following.
Venezuelan Foreign Minister Rafael Ramirez said that the excess oil on the market reached 2 million barrels per day, and it needs to be eliminated. According to him, Venezuela is ready to support 5-percent reduction in quotas.
Representatives of Ecuador, Iraq and Algeria spoke further. They noted that they were not surprised by Russia's decision not to reduce oil production. (Recall, Russia is not a member of OPEC, but only an observer.)
Libyan Vice-Premier Abdurrahman Atahir al-Ahirish, who chaired the meeting, said that OPEC is ready for dialogue with Russia, the European Union and G20 and is “focused” on stabilizing the market.
Towards evening, the representative of Saudi Arabia said that OPEC had made a “good decision”. On these words, the cost of a barrel of “Brent” fell below 75 dollars.
Eight minutes later, Kuwait’s oil minister said that OPEC had not changed its production quotas. And he added that he was "pleased with the decision of OPEC."
The organization is united in managing the market in the current situation, said Iranian Oil Minister Bejan Namdar Zangane. According to him, the cartel made a decision that does not coincide with the position of Iran, but Iran agrees with this decision.
As the Minister of Oil of Ecuador clarified, OPEC retained oil production quotas at the level of 30 million barrels per day.
By evening, a press release of the conference appeared in the press, where it was stated that the cartel left production quotas unchanged (at the level of 30 million barrels per day). It is also reported that the next OPEC conference will be held on 5 June 2015 of the year.
After 5 minutes, a comment was followed by the Ministry of Finance of the Russian Federation. Officials said that OPEC’s decision not to reduce quotas means that the problem of oversupply in the global oil market will not be quickly resolved.
Psychological market expectations led to the fact that 48 rubles per dollar began to be given on the Moscow Stock Exchange (that is, the ruble fell again).
OPEC Secretary General Abdullah Salem al-Badri made a statement concerning Russia, in which he noted that the cartel would compare production volumes and forecasts with those of the Russian Federation. He also said that he considers the current oil price "good" and added that the fall in prices is not of fundamental importance for OPEC countries.
On 19: 33 h. 27 November Moscow time, the cost of a barrel of Brent crude fell below the 72 dollar, and WTI fell below the 68 dollar. The ruble continued to fall against both the dollar and the euro.
On 19: 55 h. The cost of a barrel of Brent has returned to a level above 73 dollars per barrel, TASS reports.
Yesterday evening, Rosneft President Igor Sechin gave an interview to the Austrian edition of Die Presse, where he said that the oil market was on the verge of a big redistribution.
Thus, let us add from ourselves, the “unobtrusive” proposal of Venezuela (which, by the way, Ecuador joined) to reduce production by 5% did not meet with the understanding of the cartel participants. As it became clear from the journalistic “minutes” of the meeting, Arab representatives of OPEC consider prices “good” and even assure the public that the fall in prices does not matter. Meanwhile, the opinion of the Venezuelan side was based on a serious argument about the excess oil on the world market in 2 million barrels every day.
Interfax cites data according to which, at the current price level, no state of the cartel members will reduce the budget.
Qatar and Kuwait turned out to be the most far-sighted: their planned calculations were based on prices in 77 and 78 dollars per barrel, respectively. But Venezuela, for example, very seriously miscalculated, stacked the budget with the price of oil in 118 dollars per barrel.
In fact, we note, sharp fluctuations in the price of oil (both a fall and a rise) in the world are not uncommon, as other readers who are inclined to conspiracy may think. The black gold market is shaking all history of its existence. This is due to the psychology of this very market, the games of speculators, financial crises, wars, production growth, and the decision of the cartel on quotas.
Fluctuations in world oil prices over the past decades, starting with the 1970s, are shown for clarity in the graph borrowed from TASS.
An interesting statement by the OPEC Secretary General Abdullah al-Badri leads RIA News". It turns out that the Secretary General of the cartel at the final press conference ... was joking with journalists.
The agency also recalls that earlier, on November 25, the head of Rosneft, Igor Sechin, arrived in Vienna with Russian Energy Minister Alexander Novak. The Russian guests at the meeting with the representatives of Venezuela, Saudi Arabia and Mexico failed to reach an agreement on the reduction of production. This was stated by the press Foreign Minister of Venezuela Rafael Ramirez.
RIA Novosti also reminds that on the eve of the meeting, the heads of oil and gas companies, including LUKoil president Vagit Alekperov, the heads of Total, Shell, BP, flew to Vienna.
As analysts have explained to RIA Novosti, large members of the cartel are interested in maintaining quotas more than other countries, starting with Saudi Arabia. Experts cited the same al-Badri, who said on the eve of the summit, that if prices were kept at the current level, the market could leave up to 50% of hard-to-recover oil, including shale oil, and this will happen in the short term. Some analysts believe that the Saudi game is built on the expectation of this.
Several opinions of Russian experts lead RBC.
“Oil may fall further on 10 dollars after OPEC’s decision not to cut oil production quotas,” Oleg Kuzmin, chief economist for Russia and the CIS at Renaissance Capital, told the agency.
According to him, the rate of the Russian currency may soon amount to 50 rubles. for a dollar.
Sergey Romanchuk, the head of operations in the monetary and foreign exchange market of Metallinvestbank, is also confident that oil prices will go down: “Judging by this decision, oil prices will go down, and those peaks that showed the dollar / ruble rate in early November will be tested in the near future. I don’t know whether the Central Bank will consider these levels of the fall of the ruble, for example, before 50 rubles per dollar, a threat to financial stability. Perhaps the Central Bank will have to intervene to prevent another start of the process of converting ruble deposits into currency. ”
Finally, there is the opinion of international energy experts.
In the middle of this month, experts from the International Energy Agency announced that the trend towards a decline in oil prices has not yet exhausted itself. They predict that the decline in demand for black gold from China and production growth in the United States will lead to a fall in oil prices below the current lows at the beginning of 2015.
Add to this that the most recent today's price of a barrel of Brent oil was 72,15 dollars (a fall of 0,92% compared to the last price of yesterday evening). Thus, while continuing to fall.
And, judging by the words of the OPEC Secretary General, Saudi Arabia is really trying, if not to oust the United States from the oil market, then, at least, to noticeably weaken the position of the new participant in world trade in black gold. Washington got into such a strange situation that it does not even know how to object and whether it is necessary to object at all: after all, Riyadh is beating Moscow hard at the same time! And now the White House is used to operating politics to the detriment of the economy.
Among the first losers, who will have to seriously tighten their belts and play in inflation, will undoubtedly be Venezuela and Russia. The latter is being stifled by Western sanctions, which, by the way, also apply to Rosneft.
And yet, before you panic and shout “everything is lost”, you should take into account the existing high market demand for black gold, which is growing annually. In addition, low prices may further spur this demand. It usually happens on the market.
Before the meeting in Vienna, the Minister of Petroleum of Kuwait, Ali Saleh al-Omayr, made a curious statement that the OPEC countries would accept any price for oil, at least 60 dollars per barrel. Following his words, Brent crude prices fell below 76 dollars per barrel.
Then the 166 conference of the cartel began, a detailed chronicle of which gives TASS.
Among the key statements are the following.
Venezuelan Foreign Minister Rafael Ramirez said that the excess oil on the market reached 2 million barrels per day, and it needs to be eliminated. According to him, Venezuela is ready to support 5-percent reduction in quotas.
Representatives of Ecuador, Iraq and Algeria spoke further. They noted that they were not surprised by Russia's decision not to reduce oil production. (Recall, Russia is not a member of OPEC, but only an observer.)
Libyan Vice-Premier Abdurrahman Atahir al-Ahirish, who chaired the meeting, said that OPEC is ready for dialogue with Russia, the European Union and G20 and is “focused” on stabilizing the market.
Towards evening, the representative of Saudi Arabia said that OPEC had made a “good decision”. On these words, the cost of a barrel of “Brent” fell below 75 dollars.
Eight minutes later, Kuwait’s oil minister said that OPEC had not changed its production quotas. And he added that he was "pleased with the decision of OPEC."
The organization is united in managing the market in the current situation, said Iranian Oil Minister Bejan Namdar Zangane. According to him, the cartel made a decision that does not coincide with the position of Iran, but Iran agrees with this decision.
As the Minister of Oil of Ecuador clarified, OPEC retained oil production quotas at the level of 30 million barrels per day.
By evening, a press release of the conference appeared in the press, where it was stated that the cartel left production quotas unchanged (at the level of 30 million barrels per day). It is also reported that the next OPEC conference will be held on 5 June 2015 of the year.
After 5 minutes, a comment was followed by the Ministry of Finance of the Russian Federation. Officials said that OPEC’s decision not to reduce quotas means that the problem of oversupply in the global oil market will not be quickly resolved.
Psychological market expectations led to the fact that 48 rubles per dollar began to be given on the Moscow Stock Exchange (that is, the ruble fell again).
OPEC Secretary General Abdullah Salem al-Badri made a statement concerning Russia, in which he noted that the cartel would compare production volumes and forecasts with those of the Russian Federation. He also said that he considers the current oil price "good" and added that the fall in prices is not of fundamental importance for OPEC countries.
On 19: 33 h. 27 November Moscow time, the cost of a barrel of Brent crude fell below the 72 dollar, and WTI fell below the 68 dollar. The ruble continued to fall against both the dollar and the euro.
On 19: 55 h. The cost of a barrel of Brent has returned to a level above 73 dollars per barrel, TASS reports.
Yesterday evening, Rosneft President Igor Sechin gave an interview to the Austrian edition of Die Presse, where he said that the oil market was on the verge of a big redistribution.
Thus, let us add from ourselves, the “unobtrusive” proposal of Venezuela (which, by the way, Ecuador joined) to reduce production by 5% did not meet with the understanding of the cartel participants. As it became clear from the journalistic “minutes” of the meeting, Arab representatives of OPEC consider prices “good” and even assure the public that the fall in prices does not matter. Meanwhile, the opinion of the Venezuelan side was based on a serious argument about the excess oil on the world market in 2 million barrels every day.
Interfax cites data according to which, at the current price level, no state of the cartel members will reduce the budget.
Qatar and Kuwait turned out to be the most far-sighted: their planned calculations were based on prices in 77 and 78 dollars per barrel, respectively. But Venezuela, for example, very seriously miscalculated, stacked the budget with the price of oil in 118 dollars per barrel.
In fact, we note, sharp fluctuations in the price of oil (both a fall and a rise) in the world are not uncommon, as other readers who are inclined to conspiracy may think. The black gold market is shaking all history of its existence. This is due to the psychology of this very market, the games of speculators, financial crises, wars, production growth, and the decision of the cartel on quotas.
Fluctuations in world oil prices over the past decades, starting with the 1970s, are shown for clarity in the graph borrowed from TASS.
An interesting statement by the OPEC Secretary General Abdullah al-Badri leads RIA News". It turns out that the Secretary General of the cartel at the final press conference ... was joking with journalists.
“Will this prevent you from filling your car if the price continues to fall?” If you are not a trader, this should not be a problem for you. It should be good for a journalist. ”
The agency also recalls that earlier, on November 25, the head of Rosneft, Igor Sechin, arrived in Vienna with Russian Energy Minister Alexander Novak. The Russian guests at the meeting with the representatives of Venezuela, Saudi Arabia and Mexico failed to reach an agreement on the reduction of production. This was stated by the press Foreign Minister of Venezuela Rafael Ramirez.
RIA Novosti also reminds that on the eve of the meeting, the heads of oil and gas companies, including LUKoil president Vagit Alekperov, the heads of Total, Shell, BP, flew to Vienna.
As analysts have explained to RIA Novosti, large members of the cartel are interested in maintaining quotas more than other countries, starting with Saudi Arabia. Experts cited the same al-Badri, who said on the eve of the summit, that if prices were kept at the current level, the market could leave up to 50% of hard-to-recover oil, including shale oil, and this will happen in the short term. Some analysts believe that the Saudi game is built on the expectation of this.
Several opinions of Russian experts lead RBC.
“Oil may fall further on 10 dollars after OPEC’s decision not to cut oil production quotas,” Oleg Kuzmin, chief economist for Russia and the CIS at Renaissance Capital, told the agency.
According to him, the rate of the Russian currency may soon amount to 50 rubles. for a dollar.
Sergey Romanchuk, the head of operations in the monetary and foreign exchange market of Metallinvestbank, is also confident that oil prices will go down: “Judging by this decision, oil prices will go down, and those peaks that showed the dollar / ruble rate in early November will be tested in the near future. I don’t know whether the Central Bank will consider these levels of the fall of the ruble, for example, before 50 rubles per dollar, a threat to financial stability. Perhaps the Central Bank will have to intervene to prevent another start of the process of converting ruble deposits into currency. ”
Finally, there is the opinion of international energy experts.
In the middle of this month, experts from the International Energy Agency announced that the trend towards a decline in oil prices has not yet exhausted itself. They predict that the decline in demand for black gold from China and production growth in the United States will lead to a fall in oil prices below the current lows at the beginning of 2015.
Add to this that the most recent today's price of a barrel of Brent oil was 72,15 dollars (a fall of 0,92% compared to the last price of yesterday evening). Thus, while continuing to fall.
And, judging by the words of the OPEC Secretary General, Saudi Arabia is really trying, if not to oust the United States from the oil market, then, at least, to noticeably weaken the position of the new participant in world trade in black gold. Washington got into such a strange situation that it does not even know how to object and whether it is necessary to object at all: after all, Riyadh is beating Moscow hard at the same time! And now the White House is used to operating politics to the detriment of the economy.
Among the first losers, who will have to seriously tighten their belts and play in inflation, will undoubtedly be Venezuela and Russia. The latter is being stifled by Western sanctions, which, by the way, also apply to Rosneft.
And yet, before you panic and shout “everything is lost”, you should take into account the existing high market demand for black gold, which is growing annually. In addition, low prices may further spur this demand. It usually happens on the market.
Observed and commented on Oleg Chuvakin
- especially for topwar.ru
- especially for topwar.ru
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