OPEC+ agreement may be cancelled

Baku. 21 July. REPORT.AZ/ The meeting of the OPEC Monitoring Committee and oil ministers of non-member states held in St. Petersburg (Russia) on July 24 is of great importance.

Report informs, OPEC understands that the Vienna agreement signed on November 30 is going to fail. Global oil reserves are not diminishing, while in Libya and Nigeria (exceptions of agreement) as well as shale oil production in the United States continues to rise.

OPEC is currently unable to influence the US shale oil producers, but its impact on Libya and Nigeria remains challenging. But the most important thing is even if Libya and Nigeria cut production, prices will rise, and this time US will further increase production. That is, the situation in the oil market has reached a critical point. The thing is, it is difficult to convince Libya and Nigeria. These two countries have faced a sharp financial need due to internal problems. Also, Ecuador and Kazakhstan's non-compliance with production quotas threatened the future of the OPEC+ agreement. Thus, increasing the production of these countries can also encourage other countries to take such a step. In this case, OPEC+ agreement will be canceled and then oil price may drop to $ 20/barrel.

Analytical Group of Report informs, if Libya and Nigeria decide to join agreement in summit oil prices will exceed $ 50 / barrel after a short period of time and return to $ 45/bbl again.