english issue
So, in spite of the global respect of
the production cut, the resumption
of the production in Libya and
Nigeria affected largely the prices.
And it is what explains why the
rebalancing of the market will
take time, even if stocks have
dropped downward for a few
months.
Russia would be
opposed to an
increase in
the reduction
The idea to see the oil producing
countries to discuss an increase
in the reduction volume on July
24th during the next meeting
of the OPEC and non OPEC
Joint Ministerial Monitoring
Committee was swept away by
Russian officials who expressed
themselves anonymously in mass
media.
Thus, according to the Russian
authorities “Any new reduction
of offer in a little bit of time after
the extension of the existing
agreement would send a bad
message to the oil market”. Such
a position could suggest that
OPEC, Russia and their allies are
nervous and that their pact aiming
at reducing the production of 1.8
million barrels per day until March
2018 does not suffice to support
the prices. Several analysts
suggested that to reach quickly
a result likely to rebalance the
market and ensure an increase
in prices, it is necessary that the
producing countries increase the
volume of their production cut. A
reduction of 1.8 million barrels per
day would not be sufficient to have
an effect on the market.
As regards price, if during the first
quarter of this year an average
of 55 dollars the barrel had been
reached for Brent, this average
should drop approximately to
50 dollars the barrel for the first
half of the year, which remains
nevertheless a good performance
for OPEC which had targeted a
barrel over 50 dollars when it
decided to reduce its production.
In this regard, it remains the
possibility of an increase in prices
for the second half-year, thanks to
the approach of winter which will
witness an increase in demand.
But the structural rebalancing of
the market could not take place
before 2018.
5 2 / O I L & G A S b u si n e ss / NU M É R O 2 7 / j u i l l e t - a o û t 2 0 1 7