The balance of supply and demand at the oil market continues to remain the main factor of change of oil prices. Volatility will remain in quarter 3, 2015 and Brent will be traded in the range between $55.00 and $70.00 per barrel, while average price of one barrel of oil during quarter 3 will be $62.00-65.00, believe the analysts polled by RIA Novosti.
Change of level of production of shale oil in the US still remains one of the main factors of growth or reduction of oil prices, analysts believe. “We see that number of drilling rigs has significantly declined, but on the other hand, labor productivity has grown, technological innovations have been introduced and the costs have been reduced,” said Valerii Nesterov, Sberbank CIB analyst.
“Will production go down in the US and when it is going to decline is the main factor at the oil market,” said Him Burkhardt, senior expert of global oil markets and energy scenarios of IHS analytical company.
Even average WTI oil price of $65.00 per barrel could be enough to launch the suspended drilling rigs in the US,” Hansen believes. “If WTI oil costs $65.00 per barrel, many wells that have been drilled, but have not been developed, will be relaunched and change the perspectives of growth for the US,” he said.
“As shale oil production gradually ceases to grow, during six months this year OPEC has increased oil production by more than 1 million barrels a day and therefore “violated the agreed target quota of 30 million barrels a day,” Burkhardt added.
“OPEC hopes that reduction of the volume of production in the US and a stable growth of demand in the coming months and early next year will raise the prices higher and the danger of over-production will be no longer real,” said analyst of Saxo Bank Ole Slot Hansen.
OPEC members “act in correspondence with their strategy and policy,” said Nesterov. “First of all it is important what is going to happen with Iraq – there is political uncertainty and political risks involved. The production in Saudi Arabia, which has reserve capacities, is also important, “ he added.
Lifting of the sanctions against Iran is also possible. “If the sanctions are lifted, then Iran will become an important factor for the oil market and most likely we will see change of oil price within a short period of time,” majority of experts believe.
