TODAY.AZ / Business

Oil era is over, expert says

27 May 2016 [18:11] - TODAY.AZ

/By Azernews/

By Fatma Babayeva

The world is looking forward to the upcoming meeting of OPEC, which will be held on June 2 in Vienne. Whether the cartel members will be able to reach a consensus on freezing oil production and prop up tumbling oil prices this time is a question at issue.

To expect that OPEC countries will reach an agreement in June meeting and influence global oil prices is pointless, said Oleg Anashkin, a research fellow at Russian National Research University Higher School of Economics.

“Whatever decision OPEC member states will together make, whatever they declare, each of them will act for its own favor” he told Trend.

The oversupply of oil in the global market was named as the main reason for the fall in the price of oil from $115 in June 2014 to about $50 per barrel in May 2016. OPEC- an organization which always acted as regulator of oil prices- could not solve the glut problem to date.

Anashkin noted that leading players in the oil market are beginning to realize that age of oil is gradually coming to an end, which means it is necessary to find a way to switch into next technological mode, and any kind of the re-orientation requires lots of funds.

Funds can be obtained, according to the expert, for example if all producers agree to production cuts in order to push up prices, and then sell it to the maximum.

Earlier, the Doha gathering of oil producers on April 17 failed to reach an accord on curbing oil production at the level of January 2016.

Although, the Doha meeting ended without any significant result, oil prices have been experiencing rise since then, and now stand at about $50 per barrel.

On May 27, July contracts of WTI crude oil were traded at $48.96 in New York Mercantile exchange –NYMEX, which is $0.52 or 1.05 percent lower compared to the previous day.

In the meantime, July contracts of Brent Crude stood at $48.90 by experiencing a decline by $0.69 or 1.39 percent on the same day. The cost of Azeri Light amounted to $51.31 per barrel ($0.69 increase) on May 25.

OPEC’s oil basket price was $45.43 on May 26 which is $0.46 increase compared to May 25, according to the official website of the organization.

URL: http://www.today.az/news/business/151160.html

Print version

Views: 1512

Connect with us. Get latest news and updates.

Recommend news to friend

  • Your name:
  • Your e-mail:
  • Friend's name:
  • Friend's e-mail: