Oil: OPEC Countries turn reducing the world production of

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The global oil market is in tension because of the escalation of the trade conflict between the US and China. On the other hand, quotes are held by OPEC countries, which continue to decrease production.
Yesterday the price of oil at the moment fell to $71,74 per barrel. The reason why there was such a price spike is likely related to the fact that Russia may reconsider the terms of the transaction to reduce production for the coming year. And this revision will increase production. Because of this, market participants panicked investors began to record futures contracts.
As we know, Saudi Arabia has exceeded the terms of the transaction to reduce oil production. Next month’s OPEC meeting will decide to extend the reduction of production of black gold in the second half. Such a strategy would, first, keep the stability of the global oil market, and secondly to balance it on the background of the ongoing trade war, the United States and China.
Even if Russia refuses to support in full a deal with OPEC, it would not affect global oil market – Saudi Arabia is the leader of the group, so will be able to correct the decision of the Russian Federation in the framework of the exporting countries.
The United States ceased to obtain enough oil from Venezuela, but this shortage will be able to compensate Russia. Our country is somehow interested in increased production. Last year Russia supplied the United States about 137 million oil. This year the figure may be increased.
Amid trade wars and sanctions against Iran and Venezuela, oil prices are more likely to rise than to fall. And the base scenario of production cuts would be an additional stimulus for growth of quotations to the price level of $80 per barrel.
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Gaidar Hasanov
Expert
“International financial center”