Tuesday, June 2, the price of oil Brent for the first time in almost three months exceeded $39 per barrel. The energy rises in price in anticipation of the OPEC meeting+, which can be held on 4 June. According to experts, the countries — exporters of hydrocarbons could be extended until the end of 2020 existing agreements to reduce oil production. Also support to quotations render the recovery of global demand for fuel as the lifting of quarantine restrictions in some States. Further price growth is limited due to concerns associated with the second wave of distribution COVID-19, and the risk of resumption of trade war between the US and China, analysts say. How in these conditions the price of oil may change before the end of summer, at RT.
On Tuesday, 2 June, world oil prices are steadily growing in the course of global trades. In the first half of the day the cost of raw materials of benchmark Brent crude on the ICE exchange in London grew by 2.5 per cent to $39.3 per barrel. Quotes American variety WTI was up 2.3% and reached $36,2 per barrel. The values were the highest since March 11.
According to analysts, the energy rises in price in anticipation of the OPEC meeting+. Originally the meeting of the countries — exporters of oil have been scheduled for June 9-10, however, the parties to the transaction considering the possibility to hold the talks earlier on June 4, writes TASS with reference to sources.
We will remind that in may and June to combat global oversupply of the commodity countries — participants of the transaction OPEC+ reduce hydrocarbon production to 9.7 million barrels per day. Under the agreement, from July until the end of 2020 a reduction of oil production will fall already 7.7 million barrels per day, and from January 2021 to April 2022-St — 5.8 million barrels per day. However, during the June meeting, the States could agree to extend the current terms of production to the end of the year.
“If the initiative is supported by the several parties to the transaction to extend until the end of the year maximum amount reduction of oil production to 9.7 million barrels per day, the cost of raw materials may continue to increase. The likely postponement of the OPEC meeting+ 9 on June 4 suggests that the member countries of the Alliance are close to consensus on this issue,” — said RT expert on the stock market “BCS” Dmitry Babin.
Note that under the deal, the main reductions are in Russia and Saudi Arabia. Each of the two countries reduces the production of energy by 2.5 million barrels per day. Earlier in Riyadh announced its intention to further reduce production by another 1 million barrels per day.
The decrease in the production of hydrocarbons occurs in several countries — exporters of raw materials, not participating in the agreement OPEC+. We are talking about the USA, Norway, Argentina and Canada.
According to estimates by the International energy Agency (IEA), thanks to the efforts of all countries to reduce production in may, the supply of oil on the world market had reduced by 12 million barrels per day. According to the Russian energy Ministry, in the following months the total reduction of production world production of hydrocarbons may reach 15-20 million barrels a day.
In addition, oil prices respond positively to the gradual weakening of quarantine measures in several countries. According to estimates of the IEA, the worldwide number of people living under restrictions, fell in may to 2.8 billion compared to 4 billion in April.
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“In the coming months if the world will continue to mitigate quarantine measures, start of production, and hence will increase oil consumption,” — said in a conversation with RT, the head of the analytical Department AMarkets Artem Deev.
According to experts, in the near future, investors will closely monitor the pace of recovery in the world economy. As noted by Dmitry Babin, the fall in global GDP should slow down in the third quarter, which may additionally hold oil prices.
Meanwhile, if the economic recovery will be slower expectations for a possible second wave COVID-19, then commodity prices may return to levels of $15-30 per barrel, did not rule out the analyst.
“Moreover, another risk for all markets remains the threat of the rising political tensions between the US and China. If the parties go to the aggravation of the conflict, it first of all will strike on commodity markets as China is one of the largest consumers of raw materials”, — said Dmitry Babin.
However, experts are not expecting such developments in the near future. Therefore, in terms of reduction of production countries of OPEC+ in the summer the price of oil may exceed the psychological level of $40 per barrel.
“Under the baseline scenario, in June the price of Brent crude oil will be in the range of $36-40, and the end of the summer quotes can move in the range of $40-45. At the same time WTI in the next month to be traded at $35-38, and by the end of summer the price reached $38-42 per barrel”, — said Dmitry Babin.