Oil quotes are awaiting “new drivers of movement” in the form of the publication of data on US reserves and a meeting of the OPEC + monitoring committee, says Elena Kozhukhova, an analyst with VELES Capital.
According to her, today the world oil market is showing a “neutral attitude.” “The nearest futures for Brent and WTI by the middle of the session in the Russian Federation consolidated after the fall of the previous sessions, changing by less than 0.5%,” the expert said in his review.
She points out that “prices have suspended the decline at the supports of $ 62 and $ 59, respectively, and are waiting for new drivers of movement in the form of the publication of weekly data on US stocks and a meeting of the OPEC + monitoring committee later in the week.”
Let us also recall that at the end of the first quarter of 2020, several waves of falling prices for “black gold” swept across the world oil market. The negative situation was caused by a whole range of factors: a general overproduction of raw materials, a sharp drop in demand amid the rapid spread of the coronavirus infection COVID-19 (a pandemic was announced on March 11) and concerns about its impact on the global economy, as well as the collapse of the OPEC + deal (officially from April 1, but in fact after fruitless negotiations between the oil-producing countries at a meeting on March 6 in Vienna).
However, on April 12, the OPEC + countries agreed on a new deal, in which 23 states became participants. The agreement is designed for 2 years – from May 1, 2020 to May 1, 2022. The new OPEC + deal was a forced reaction of oil-producing countries to the market situation and pressure from the United States. However, in general, it did not cover the volumes of the decline in global demand, and besides, huge reserves of raw materials have accumulated on the market.
During 2020, the OPEC + countries held meetings, adjusting the parameters of the transaction taking into account the situation on the global oil market – starting in May to reduce oil production by 9.7 million barrels per day, in August they relaxed the restrictions to 7.7 million for the period until the end 2020 year.
On January 4-5, 2021, the ministers of the OPEC + countries made a compromise decision, according to which, from February, Saudi Arabia will voluntarily reduce oil production by almost 1 million barrels per day within two months, to about 8.125 million barrels per day, and a few more OPEC member countries will cut production by two months by a total of 425 thousand barrels per day. At the same time, Russia and Kazakhstan got the opportunity to increase production in February and March.
Source site www.rosbalt.ru