Expert: OPEC decision will lead to $5 rise in oil price next year

Baku. 10 November. REPORT.AZ/ The OPEC decision will lead to  a $5 rise in oil price next year, Salikhov Marcel, Head of the Economic Department at Institute of Energy and Finance told Report.

According to him, the oil price was growing rapidly after OPEC's decision, while the output was expected to down: "In this issues, it shouldn’t be forgotten that the calculation will be conducted from October 2018. Before this time, oil production had significantly grown compared to July. In addition, Iran, Libya and Venezuela have been exempted from these obligations."

Salikhov Marcel, Head of the Economic Department at Institute of Energy and Finance

"They will probably continue to pursue this law. However, to my mind, the current decision does not mean that the US has become more active in this direction. As the US oil industry will face serious hardships if the oil price is $50 or below, this decision is partly acceptable for them." 

Marsel Salixov

Salikhov Marcel, Head of the Economic Department at Institute of Energy and Finance

The expert thinks that the price change will not depend on how and how much Russia and Saudi Arabia will reduce output: "By our estimates, if that reduction occurs, the oil price will rise by $5 next year," he said.

Commenting on US’s view on output cut, Salikhov noted that the US strategy is based on implementation of NOPEC (No Oil Producing and Exporting Cartels Act) law.

"They will probably continue to pursue this law. However, to my mind, the current decision does not mean that the US has become more active in this direction. As the US oil industry will face serious hardships if the oil price is $50 or below, this decision is partly acceptable for them," the expert said.