Expert expects crude prices to jump up to $60


    Oil producers will easily negotiate a further restriction of oil output at the upcoming OPEC meeting in late May, said Oleg Anashkin, an analyst at the Russian National Research University “Higher School of Economics.

    Anashkin told Trend that oil production will decline soon following a decrease in the number of investment programs, especially in Russia.

    The oil prices will increase up to $60 per barrel or even slightly higher whether the oil producers agree or not, according to the expert’s forecast.

    “There are more political and in some ways strategic methods, in order to show that OPEC can influence pricing, but from these actions the price depends little or does not depend at all,” the economist said.

    The oil price today is more determined by futures trading, which is able to swing the price parameters in a fairly wide range and in a very short time, he told.

    “Nevertheless, the trend of rising oil prices will continue, and by the end of the year the prices will probably exceed $60,” Anashkin noted.

    In December 2016, OPEC and non-OPEC producers reached their first deal since 2001 to curtail oil output jointly and ease a global glut after more than two years of low prices. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.

    Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Sudan, and South Sudan agreed to reduce oil output by 558,000 barrels per day, including Russia by 300,000 barrels per day, starting from January 1, 2017 for six months, extendable for another six months.

    Oil prices rose on the announcement that Russia and Saudi Arabia want to extend the Vienna agreement to reduce oil production through the first quarter of 2018.

    Russian Energy Ministry Alexander Novak and his Saudi Arabia counterpart Khalid al-Falih recently agreed to do whatever it takes to achieve the desired goal of stabilizing the market and reducing commercial oil inventories to their five-year average level.

    The two will hold consultations with other producers “with the aim of achieving complete consensus” on the extended production cuts before the scheduled OPEC meeting May 25 in Vienna.

    By Sara Israfilbayova.AzerNewsAz