Expert: Oil producers to agree on output cut
Baku, Azerbaijan, May 17
By Elena Kosolapova – Trend:
Oil producers will easily agree on further reduction of oil production at the upcoming OPEC meeting in late May, Oleg Anashkin, associate professor at the Russian National Research University Higher School of Economics, told Trend May 17.
Anashkin, who is also PhD in Economics and National Economy Management,said that oil production will decline soon following a decrease in the number of investment programs, especially in Russia.
He added that the oil price will increase up to $60 per barrel or even slightly more despite the agreement or disagreement among the oil producers.
"These are rather political and strategic methods to show that OPEC can influence pricing,” he added. “But today the oil price depends little on these actions or does not depend at all.
Anashkin added that today the oil price is more determined by futures trading, which is able to swing the price parameters in a rather wide range and in a very short period.
"Nevertheless, the trend of rising oil prices will be kept and by the end of the year the oil prices will probably exceed $60," Anashkin said.
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 Jan. 1, with top exporter Saudi Arabia cutting as much as 486,000 barrels per day. Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce the output by 558,000 barrels per day starting from Jan. 1, 2017 for six months, extendable for another six months.
The next OPEC meeting will be held on May 25. Non-OPEC producers will also attend the meeting. The extension of the agreement on reduction of oil production will be discussed at the meeting.
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