The US Department of Energy has predicted a record excess of "black gold" on the market. To stop the shale tsunami, prices should fall to around $ 40 a barrel.
Experts have discovered what was the Kremlin's strategic calculation error and also how the White House would hit the Russian economy, reports Dialog.UA, citing Finance.Ru.
Because of the steps of Russia and OPEC, which, as you know, reduce production and inflated prices, there has been an increase in the cash flows of shale companies, allowing the latter to increase investment. Thus, the "shale revolution" in America received a second wind.
Recently, the US Department of Energy has predicted a record oil surplus on the market over the past three years. The shale production in America continues to exceed the most optimistic forecasts: by the end of the third quarter of this year, the total production of "black gold" has reached 11.24 million barrels a day.
It should also be noted that production volumes have increased by 1.3 million barrels a day since the beginning of 2018, and by the end of the year the growth will be 1.6 million barrels, which is a third more than the last forecast of the Ministry of Energy.
There is also a new forecast for next year, from 12.16 to 12.31 million barrels per day. After all, the global market has returned to a state of excess, which will only increase.
At the moment, barrels of oil in excess are already filling the safes. During the period of OPEC +, trade reserves in the OECD countries decreased from 3,029 to 2,806 billion barrels.
They see this problem at the OPEC level: over the next weekend, at a meeting in Abu Dhabi, OPEC + ministers will discuss production cuts again.
According to analysts from the Russian Federation's Institute for Energy and Finance, in order to stop the "shale tsunami", prices should fall to the region of $ 40 a barrel. With these quotations, the growth of production will slow to 0.3 million barrels per day in 2019, and will be replaced by a drop – 0.6 million barrels per day in 2020.
However, this oil price will have a disastrous effect on the Russian economy. For this reason, some Russian political analysts argue that America in particular increases the amount of shale oil to "strangle" the Russian economy.
Information was received on the fact that the Russian authorities were unable to obtain funds to close the holes in the state budget for three weeks.
It was also reported that Tehran gave Moscow an ultimatum "oil", demanding a reduction in production.
By the way, a year later, Russian Ural oil due to the new rules on the market will fall dramatically in price, which will have a catastrophic effect on the "fixed" economy of power.