With oil price $50-60 per barrel we can see oversupply of oil on market in 2017

With oil price $50-60 per barrel we can see oversupply of oil on market in 2017

The media continues discussions of the agreements reached at the recent meeting of the OPEC and Russia. The President of the Center for Global Studies “Strategy XXI” Mykhailo Gonchar presented his vision of the situation for LIGABUSINESSINFORM's article “The Trump Factor. OPEC and Russia have challenged shale revolution” 

 

With respect to oil prices: "If the corridor of $50-60/bbl is maintained, oil production will be increased in the US in 2017, respectively oil imports will be reduced; as a result we will have again oil surplus on the market", Mykhailo Gonchar said. - "The price will go down."

An important issue is the extent to which OPEC members and Russia are ready to comply with taken obligations. "Agreed - does not mean fulfilled. Prices are boosted by speculators. Christmas holidays are not so far ahead in Europe and the Americas. Usually, they are accompanied by falling prices because of slowdown in business activity," Mykhailo Gonchar said. - In addition, Russia is unlikely to follow the OPEC line."

As for the question of the impact of these OPEC decisions on Ukrainian market: “This price increase is not a problem for us, although the market may respond with some increase in gasoline prices," Gonchar said . But because of the high share of taxes in the cost of a liter of gasoline, connection of oil prices and prices at pumps is not so straight.

The full version of the article read here (in Russian)

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