| Other Photos |
 |
|
 |
OPEC to Bolster Oil Market from Below
The prices for crude oil shed 22 percent in five weeks, from the July 11 WTI peak of $147.3/bbl to today’s $114.5/bbl. In the environment when the global economy outlooks are downgraded at large mostly on economy slowdown in the United States and in Europe, the forecasts for energy consumption are going down as well and the oil price is expected to sink to $100/bbl again. The London-based CGES warned about this scenario yesterday, characterizing the market condition as bearish.
Indeed, even the temporarily loss of the Caspian oil due to the terror attack of Baku-Tbilisi-Ceyhan pipeline and the war in South Ossetia failed to fuel the prices despite that the daily amount was 1 million bbl, or roughly 1.2 percent of global production.
OPEC will probably respond to the CGES warning in time of September meeting, which decision could be to trim the production in an effort to sustain the prices. Indeed, oil nations have got accustomed to skyrocketing price of crude oil, their social and investment costs have grown materially and adjusting the budget to relatively low prices won’t be easy.
The formal resolution of OPEC about production decline is hardly probable, but oil producers may agree on the actual reduction off-the-record. CGES forecast is that OPEC will endeavor to keep the prices at no less than $100/bbl.
The tricky point is the difference in estimates of OPEC and independent analysts for the crude oil production outside OPEC. So, if the oil producers overestimate crude oil output outside the cartel, the reduction in OPEC production would be excessive with the prices soaring anew to $150/bbl instead of $100/bbl.
www.kommersant.com
All the Article in Russian as of Aug. 19, 2008
|
|
|
