Le Monde | • Updated | By
Oil markets are in search of any decision likely to make up classes. They come to find one: the prospect of a meeting, in the course of February, between producing countries, whether or not members of the Organization of Petroleum Exporting Countries (OPEC), which could lead to lower crude production. Prices are reassembled, Thursday, January 28, to close at 34.48 dollars per barrel of Brent in London and 33.68 dollars per barrel WTI in New York.
Read also: endless fall in oil prices
“Some countries have proposed such an initiative and the issue is being studied by different countries, announced on Thursday, the Minister Russian energy. From our side, we confirmed the possibility of our participation. “ M. Novak referred to a “coordination” with OPEC in a context where prices fell in mid-January under 28 dollars a barrel.
“Currently, OPEC countries are trying to convene a meeting with the participation of OPEC members and non-members countries in February” said Mr. Novak, quoted by Russian news agencies.
M. Novak went further by explaining that the Saudi kingdom, lead manager of the thirteen OPEC members, had several times proposed to reduce oil production in each country up to 5% to support prices. Saudi Arabia would not be hostile to such a decline, provided it is shared; but she would not bear alone the market consolidation efforts at the expense of market share.
True reversal
Such an outcome would be a real change. So far, the cartel proved divided and Riyadh has imposed his strategy, which led to a collapse in prices (- 70% since June 2014). All members now pumping at their maximum potential, except Saudi Arabia, to maintain their market share. Russia took part in this fast movement. Its daily production reached 10.7 million barrels in 2015, a record since the fall of the Soviet Union in 1991
For now, the Saudi Arabia has not officially responded, and the prospect of OPEC policy change by tightening the valves away. Four members of the cartel have even acknowledged that they had never heard of the discussions raised by Mr. Novak
Read also:. Oil: Saudi Arabia, Saudi Aramco ready to open its capital
Despite a heavy budget deficit in 2015 and 2016, Saudi Arabia is not desperate. This does not even Russia, 50% of budget revenues come from oil and gas. Already hit by Western sanctions imposed after the annexation of the Crimea, in 2016 it entered its second year of recession, with a ruble at an all-time low against the dollar. The government must get out of this situation. “If prices remain at a low level for a long time, some decline [of production] can , recently said Deputy Prime Minister Arkady Dvorkovich. Our partners know that. “
Read also the editorial: Russia in the economic turmoil
We may question the word ” partners “ particularly with regard to oil monarchies of the Gulf. Russia has an observer seat on OPEC. The cartel and Russia certainly weigh for 40% of world production, but they have never wanted to coordinate their action. When Riyadh, Abu Dhabi and Kuwait City tightened the valves, Moscow took advantage of the rise in prices without having to cut production, otherwise at the margin. In addition, the two countries have divergent political interests in the Middle East: Russia supports the regime of Bashar Al-Assad and his Iranian ally, the sworn enemy of the Saudi kingdom
Caution
It is therefore necessary to take these ads very carefully. It would also have Russia and its many producers make disciplined. Nothing is less sure. Mr. Novak has met on Wednesday to propose their “ possible coordination” with OPEC. But competition is fierce within the country, which, moreover, does not have large storage capacities, experts say. The year 2015 has shown that as the price of oil is above operational extraction costs, companies continue to pump.
In September 2015, the CEO of public giant Rosneft announced that OPEC had proposed to Russia to join. But several factors make this utopian approach, by the admission of Igor Sechin, a close Putin. Part of the production is provided by private companies that are not in the Kremlin orders, “ which is unusual for OPEC,” where public company is usually an outgrowth of the state. In addition, extreme weather conditions of the Far North and Siberia make it difficult to fast regulation of the Russian production. And, more profoundly, Moscow may consider submitting his production – and its budget revenue. – The decisions of an international cartel
As for the United States (about 9.5 million barrels per day) partly responsible for the current overproduction and falling prices, they are not intended to go to such a meeting. Only the iron law of the market will bend the oilmen Texans. And some analysts question whether Russia will not support the rumor on purpose of such a meeting to raise prices
Read also:. In the United States, bankruptcies seen in the oil sector
No comments:
Post a Comment