Oil price: OPEC is not able to provide growth to 70 dollars

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Despite the fact that crude oil inventories in the United States was slightly below forecasts, there was a drop in futures contracts on oil by 3.1%.
The main reason was a possible truce between the United States and Iran. This means that the global market can be added to the export volumes of Iranian oil, which will create an even greater imbalance in the supply side. Given that because of the hurricane “Barry” was suspended work on oil wells, energy information Agency, the United States can report on the further reduction of oil next week. This data in the moment can have a positive impact on the market, but strong growth should be expected.
Oil prices now reflect all applicable external and internal factors. For the most part speculative market plays an important role – it increases volatility. Major parties are closely watching the negotiations between the US and China, holding the finger on the pulse. The slightest improvement of trade climate between the two countries are able to raise oil prices to $70 per barrel.
If OPEC countries agree on a little more production cuts, for example, 1.6 or 1.8 million barrels per day, now we would have a figure of $70 – 72 a barrel.
It is clear that while the OPEC countries and Russia would give a significant share of the US market. But in my opinion, high oil prices are acceptable, because here we make the choice in favor of quality, not quantity.
Based on the above factors, oil prices will not be able to recover quickly and play 3.1% of the recent decline. The stabilization of the global oil market seen through the baseline scenario, cuts in OPEC production, but this is clearly not enough to keep prices steadily increased.
While maintaining other conditions Brent will trade at $63,20 – of 64.00 per barrel, WTI – at around $56 per barrel.
Gaidar Hasanov
“International financial center”