Azerbaijan, Baku, May 26 / Trend A. Badalova /
Major event for oil market will be OPEC meeting at this week to be held in Vienna on May 28. Experts said that cartel will not change quota on profit.
Recent increasing prices for oil suit for members-countries of the organization. They are unlikely to make decisions about further reduction of quotas, U.S JPMorgan bank analysts said.
Prices for oil on the world market demonstrated significant growth last week. Cost of U.S light oil WTI hit $61.67 per barrel by the end of week. Cost of North sea Brent hits $60.78 per barrel. Totally, cost of both kinds increased 9 percent per week.
Prices for oil slightly reduced on Tuesday morning expecting for OPEC's decision about preservation of quotas for output. Cost of futures contract for WTI with delivery at New York commodity exchange dropped from $0.69 to $60.98 per barrel in July. Price of July futures for Brent reduced from $0.21 to $60 per barrel.
Participants-countries of cartel can reduce output by strengthening discipline of participants on fulfillment of existing quotas despite low probability of OPEC reduction of output at upcoming meeting, reported Bloomberg agency with reference to words of Algeria's oil minister Shakib Helil. Strengthening of discipline of participants-countries will allow reducing output by 800,000 barrel per day, he said.
Presently, quota fixed by OPEC hits 24,845 million barrel per day. OPEC decided about reduction of oil output in the amount of 4.2 million barrel per day because of sharp reduction of prices for oil last year. Volume of OPEC output hit 25.81 million barrel per day that 965,000 barrel (3.88 percent) per day more than fixed quota despite announced reductions last month.
The U.S state energy information administration (EIA) expects that total volume of OPEC oil production will hit 33.5 million barrel per day in average in 2009. This index is 2 million barrel less compared to the volume of 2008. According to EIA forecasts, OPEC output will hit 34.4 million barrel per day in 2010.
Excess production capacity increased 4.3 million barrel in April 2009. According to forecasts, it will exceed 5 million barrel per day in 2010.
Medium-term forecasts remain high despite prices for oil demonstrate reduction the second day running on the threshold of OPEC meeting. In its last report JPMorgan increased forecasts of prices (Brent) to $55.5 per barrel in 2009 and to $65.5 per barrel in 2010.
According to forecasts of Goldman Sachs investment bank, average price for oil will hit $70 in 2010. According to the bank's forecasts, it s possible to reach $90 per barrel in 2011.
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