Oil price increases after reports of a storm in the Gulf of Mexico

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Oil prices grow against the background of Mexican storm, which had to slow down oil rigs. But we must understand that growth is temporary. Many market participants will rely on the baseline scenario of the formation of oil prices, namely the reduction of oil production by OPEC countries+.
Tensions in middle East supported prices. Iran intends to continue enriching uranium, and in this regard, the tensions will only grow. Prices, in principle, play this scenario – Iran is already under sanctions, and the United States intend to continue the tightening of restrictive measures. For this reason, OPEC countries are excluded from the Covenant to reduce the production of Iran, Libya and Venezuela. However, the overall balance of supply and demand is not much affected.
The main manipulators of the oil market is the United States. They do not intend to stop oil production. Besides, last year we launched several new pipelines in Texas. U.S. oil companies have a high degree of profitability, where the return on shale oil extraction may occur at lower prices, in the range of $30 – 40 per barrel.
Yesterday, OPEC published its monthly report where they predict that oil prices will rise by 1.14 million barrels a day. The export of oil by countries outside OPEC, may be increased to 2.4 million barrels per day in 2020. This is higher by almost 16% compared to the current year.
As you can see, in spite of increased production in the US, the forecast is quite positive for the overall market. In the medium and long term, major market participants will lay this scenario in their investment ideas.
In this regard, oil prices will keep growth and can reach $68,10 per barrel for Brent and $61,80 for WTI.
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Gaidar Hasanov
Expert
“International financial center”