Saving OPEC meeting Russia and OPEC in jeopardy
photo: Gennady Cherkasov
According to the oil Minister of Ecuador, Carlos Pareja, the meeting of his country with colleagues from Venezuela, Colombia and Mexico postponed due to the complex schedules of the participants. A new date was planned for late March — early April.
This meeting, the market was looking forward to. It Latin American oil companies hoped to develop a common position regarding the oil production decline. And she definitely should have been held a few days before the meeting of the independent producers and OPEC, because the negotiations with OPEC Latin Americans wanted to present a United front.
Ecuador and Venezuela are OPEC, Colombia and Mexico — no. They both confirmed their intention to freeze the number of wells to reduce the overabundance of raw materials on the market.
About the same plans announced by Saudi Arabia, Qatar, Algeria, Nigeria, Oman, Kuwait, Arab Emirates, Iran and Iraq. Russia speaks directly of the necessity of this. The specifics of the producing countries wanted to articulate at a joint meeting. According to Deputy Minister of petroleum industry of Iraq Fayad al-NEMA, it is to be held on 20 March in Moscow. Minister of energy Alexander Novak called around the same time frame — the period from 20 March to 1 April.
But now, apparently, it will also be delayed. The Latin Americans is not profitable, so that between them there was a disagreement, because these quarrels will use the oil sheiks of the Middle East. In particular, let and cut production, but to a lesser extent than Hispanics.
However, the main cause of failure of the meeting of the miners of Latin America is probably not «complex graphics», and the lack of certainty regarding negotiations with OPEC. Included in the cartel countries, primarily the middle East, though, and declare the necessity of reducing production, endeavor to resist it. Most likely, they are trying, as they say, «on the sidelines», to determine the most favorable conditions to limit the production to a greater extent affected other market participants.
What will happen to the ruble? In the last days, when oil prices rose above $40, the Russian currency has also been strengthened. Now the dollar is worth about 70 rubles (roubles against 85 in late January, when oil fell to $28). But the quotes of «black gold» until the last moment fueled rumors of a meeting with OPEC. If the market will become obvious that the meeting was a failure, the price of oil goes down and the dollar will jump up at least to 75 rubles.
However, the retaining strap 70 rubles it is also possible — this can contribute to loud statement to any potential participant of the meeting on specific dates.
Another advantage is the application of the International energy Agency (IEA, USA) on the future growth in oil demand in 2016. Until that time, the Americans repeatedly stated that the surplus will grow and prices to fall. Now the IEA agrees that the bottom in oil prices passed. The Agency also suggests the weakening of the dollar.
By the way, the decline in production, oddly enough, can give an impetus to the development of the Russian mining industry. The fact that the majority of wells in the middle East is shallow. Technologically to quickly freeze and unfreeze them is quite simple. Russian resources mainly lie serious depths. Freeze them can lead not only to exhaustion, but even to a further decrease in access.
On the one hand, we lose the first place among oil producers. On the other hand, conservation of old fields, which by and large has exhausted itself, may force the oil industry to optimize production and focus on more profitable projects. Of course, it will take not one year, but not take advantage of this incentive is to supply our oil industry is on the brink of survival.