Lack Of Coordination Between OPEC And Other Countries May Bring Oil Prices Down To $16-$18

Lack of coordination between the Organisation of Petroleum Exporting Countries and other states may bring oil prices down to $16-$18 per barrel, British oil experts told RIA Novosti on Friday while commenting on Russia's decision to reduce output and export of oil by 50,000 barrels a day. Should Russia, Norway and Mexico fail to cut output and export by 500,000 barrels a day as required by OPEC, the oil cartel will probably decide against reducing output and export of oil by 1.5 million barrels as it promised, which means oil prices will stay within a price limit of $16-$18 per barrel. In a situation like this, Russia's decision to slightly reduce output and export of oil is quite understandable considering the tasks facing the Russian budget and development of production in the oil sector. According to the British experts, substantial reduction of oil output in Russia may affect budget goals as well as the oil sector. Apparently, cutting output and production of oil by 50,000 barrels a day is the only move Russia can make to contribute to the effort to steady oil prices on the world market without substantial damage to its oil sector. Even if OPEC and main oil producers outside it could agree on the size of reduction in oul output, oil prices would be likely to stay within a price limit of $20-$22 per barrel. In any case, they would not reach $25 per barrel because of aggravating economic recession and subsequent reduction in oil consumption in general. Experts believe that, in a couple of months, the situation on the oil market will have to be re-evaluated with allowance for the state of world economy and oil consumption in general.

Subscribe to Pravda.Ru Telegram channel, Facebook, RSS!

Author`s name Editorial Team