Baku 10° C
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Baku. 4 November. REPORT.AZ/ Oil prices may drop to 25 USD/barrel after the next OPEC summit on November 30 in Vienna (Austria).
Analytical Group of Report believes, the reason are difficulties to reach consensus on restriction of production by oil producing countries. Thus, each of oil producing countries calls on other countries to cut production but all the countries continue to increase output rapidly.
In October, OPEC's production reached 34 mln barrels / day, Russia with11.22 mln barrels/day reached the maximum level of production in the post-Soviet period, Libya and Nigeria have been added 800,000 barrels of oil to the market, Iraq and Iran, in turn, continue to increase production rapidly.In addition, officials of oil producing countries stress the importance of limiting production and express that they are close to reach an agreement in this process.
Analytical Group of Report believes increase in oil prices close to 50 USD/barrel, as well as increase in shale oil production in the US, the maximum limit not expected to exceed 40 USD in the near future.
Taking into account the winter season Vienna summit not expected to reach any agreement on limiting production. Another reason is tough battle for dominance in oil market. For this only reason, a major oil producers will not agree to limit production. Thus Iran and Iraq said they will not join the process. That leads Saudi Arabia to reduce its own production in order to support the process and this, in turn is not possible. Moreover, at present, both sides are in an unofficial war. Russia, which is a world leader in oil production will never cut oil production due to the financial problems. The country's officials said they would support freezing of production on a regular basis.
"Taking into consideration all these factors, oil market by the end of 2016 and in 2017 is expected to reach maximum tension. After the Vienna summit decline of oil prices to 25 USD/barrel in 2017 looks real", experts of agency said.
