Baku, Azerbaijan, Feb 2
By Aygun Badalova - Trend:
Oil prices will rally further reaching $45 a barrel by year-end as evidence mounts of cuts in non-OPEC supply and an improvement in global demand, without the need for OPEC to lead any coordinated cuts in output, analysts of the British economic research and consulting company Capital Economics believe.
The catalyst for the most recent jump in prices was speculation that Saudi Arabia and Russia could soon agree to an output cut, analysts said in a report, obtained by Trend.
Although analysts expect prices to rebound by the end of the year, they remain sceptical that anything tangible will come of the latest calls for coordinated action.
"A sustained recovery in oil prices will have to be built on much stronger foundations than comments from one or two Russian officials," analysts said.
Russian Energy Minister Alexander Novak last week confirmed Russia's readiness to meet with producers to discuss oil production. He said that the topic of discussion at the planned OPEC meeting in February with representatives of other oil-producing countries could be the question of oil production reducing for each producer country at the level of five percent, but a general agreement is needed for it.
In its recent summit on December 4, the OPEC failed to put a new ceiling to its output. The cartel members produced 32.182 million barrels per day in December, including some 693,000 barrels per day, produced by new member, Indonesia.
OPEC Secretary-General Abdullah al-Badri has recently called for cooperation between OPEC and non-cartel countries in order to jointly address the issue of the stock overhang.