OPEC satisfied with oil slump in US

OPEC satisfied with oil slump in US

Baku, Azerbaijan, Apr. 27

By Aygun Badalova - Trend:

The current situation on the world oil market fully suits the OPEC member-states, the director of the Russian National Energy Institute, Sergey Pravosudov said.

"OPEC rightly expects that the oil production will decline in the US and OPEC oil will be in demand accordingly," he told Trend.

Currently, OPEC controls 40 percent of the world oil supplies. All OPEC member-states are major oil exporters. Their economy depends on oil revenues. Thus, support for oil prices at an acceptable level has always been the main goal of OPEC.

Oil quotes have decreased almost twofold - from $110 to around $59 per barrel for North Sea Brent since summer 2014. The cost of Brent barrel has been close to $ 45 this year.

The expert said that today the oil prices on the world markets are growing amid the news about a decrease in production in the US.

"The oil market has been saturated today," he said. "Of course, this increased the quotation."

"First of all, this harmed the US oil production as the most expensive one," said Pravosudov, adding that the investments have very sharply decreased.

"The Americans themselves predict that in the next few days, we will see a sharp decline in oil production in the US," he said. "And, as we see, the prices went up after this news."

According to the US Energy Information Administration (EIA), the oil production in that country, over the past week, decreased by 18,000 barrels per day to 9.366 million barrels per day, or 0.19 percent less than the previous week.

As Pravosudov noted, another factor influencing the positive tendency in the oil prices is the unstable situation in the Middle East.

The reports on Saudi Arabia's attack on Yemen, despite declaring the end of the military operation, have contributed to the climbing of the oil prices on Friday to their highest level in 2015.

Following the trades last Friday, the cost of June futures for Brent exceeded $65 per barrel.

Pravosudov said Saudi Arabia's intensifying the military actions and the deterioration of the situation in Iraq would push the oil prices even more.

However, the expert doesn't expect that in the short term, the oil prices will reach a level of $100 per barrel.

"I believe the prices will remain at the level of $60-$70 per barrel," he said.

Edited by CN

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Follow the author on Twitter: @AygunBadalova

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