Baku, Azerbaijan, Aug. 17
By Elena Kosolapova - Trend:
Currently, the US is the country responsible for the lack of increase in oil prices, according to Marco Giuli, the energy issues analyst at the Brussels-based European Policy Centre.
"The flexible nature of the shale business allows US producers to restart supply as soon as market dynamics lead to their required breakeven price," said Giuli in an interview with Trend on August 17.
He added that the technological improvements in shale oil production are leading to continuing output despite a decrease in the rigs' number.
"All this means that OPEC - despite dominating shares - cannot easily raise prices above a certain level through coordinated behavior," Giuli further said.
"OPEC - despite dominating shares - cannot easily raise prices above a certain level through coordinated behavior," he said. "For this to happen, upward trends in demand need to step in, but there is a lot of uncertainty regarding this."
"Moreover, extra oil is expected to be supplied from Iran in the long term," he said. "This will be the result of lifting the sanctions."
As for oil production in the OPEC countries, the expert said that many OPEC producers are desperate for coordinating a withholding, but Saudi Arabia seems to insist on keeping the course.
"Saudi Arabia's recent bond issuance is a signal they don't intend to change strategy," he said.
At the same time, it has to be seen for how long this is consistent with huge spending plans of Saudi Arabia, he said.
In general, the latest forecasts show that oil prices may remain at a low level for several years, according to the expert.
Prices will remain at a low level in the period of one to three years, according to him.
Meanwhile, oil prices continue to fall. On the morning of Aug. 17, the futures price for WTI crude oil fell by 1.27 percent, to $41.96 per barrel.
The cost of futures for Brent crude oil fell by 1.22 percent, to $48.59 per barrel.
Edited by CN
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