War for oil: Donald trump is pushing the price down, but loses

© AP Photo / Hasan JamaliДобыча oil in the middle EastWar for oil: Donald trump is pushing the price down, but loses© AP Photo / Hasan Jamali

The price of oil, dropping by almost half in 2014, is showing signs of growth. In London trading, its cost is around $ 49 per barrel. According to most analysts, continues to decrease in quotations was determined by the increase in the number of shale gas projects (shale oil is produced not as «traditional», and in the processing of solid residue of organic matter from rocks into hydrocarbons), which received the most favored treatment from the US President Donald trump.

Now the trend is changing. American manufacturers are put into operation, fewer drilling rigs for shale products and demand for classic oil increases. Strategy States to oust OPEC market does not bring results. Analysts of the German edition of Die Welt called the situation on the oil market in 2016-2017, «paradoxical». Despite the falling prices, U.S. companies have invested heavily in shale — less than a high quality variety of oil, large reserves of which have. Projects on the brink of bankruptcy kept in suspense the oil market, because in 2016 the number of drilling rigs in the shale fields in America has increased twice — up to 765. The hydrocarbons market was threatened by chronic overproduction of «black gold».

With the willingness of the United States to develop shale business is the political will of the President of Donald trump. Shortly after taking office a politician associated with the oil business, revised environmental restrictions on the production of hydrocarbons, which operated under his predecessor. When trump more actively than before, they began to produce hydrocarbons in the Arctic and the Gulf of Mexico, and imported oil is a competitor of the slate — imposed tax.

The White house decision contributed to the impressive boom in the industry. According to the analyst «Goldman Sachs» Jeffrey Currie, the policy of trump is still able to lead to a fall in oil prices to $ 40 per barrel, «and even below». However, the American President, though, and did everything possible for the progress of the industry depends on its unpredictable elements: the shale business in the US is a collection of a large number of small producers, each of which decides for himself, to increase his production or not.

Despite the unfavorable external environment (the pressure of the shale business joins the disloyal competition of the two supplier countries that are not OPEC members, like Nigeria and Libya), the price of oil in mid-July, the caution went up. According to sources Reuters, the reason is that shale companies, without feeling the recoil slowed their investment. Rigs and fields in turnover introduced less, while it was found new sources of demand-oriented classic oil.

The market increasingly has a new player — India. Previously held in the shadow of China, the South Asian giant needs for its development in a growing number of hydrocarbons. The slowdown in the Chinese economy affecting oil prices, analysts no longer seem fatal factor. The more that the increasing interest in the black gold demonstrates his classic consumer — Germany.

According to the International energy Agency (IEA), at the end of the year demand for oil will reach 98 million barrels per day and will continue to increase in 2018 to a level of 99.4 million barrels. Demand in the first trimester of 2017, the Agency evaluated only as «mediocre», the second third of the year, according to his estimates, under the shadow of «the impressive growth of interest» among buyers of oil.

OPEC will meet in Russia

The upward trend in oil prices shows that the efforts of the organization of producers — OPEC — have agreed to reduce its production to independent suppliers, are not in vain. Russia is not an OPEC member, but is ready to coordinate with the organization of their efforts.

Twenty-fourth day of July, representatives of the monitoring Committee of OPEC, in which a key role is played by Saudi Arabia, Iraq, Iran, Kuwait and the UAE, will gather in Saint-Petersburg. On the agenda — monitoring the implementation of the agreement on production cuts (and hence the growth rates) and developing a strategy in the competition with shale projects. Thus, the US opposes itself to the majority of the producing countries and, at least for the moment losing the war for the price of oil.

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