…New cartel makes decision to freeze oil prices at $60 a barrel for a decade.
Russia’s accession to the [SAUDI ARABIA/USA] alliance has been confirmed by the participation of Russian Energy Minister Alexander Novak at the CERAWeek energy conference in Houston (TX). There, Novak confirmed that Russia has no plans to join OPEC. He also pointed out that his Ministry, basing itself on the “rebalancing of the market”, predicts oil prices in 2017 in the range of $55-60 a barrel.
Baku, Fineko/abc.az: The Kingdom of Saudi Arabia (KSA) has restored the oil alliance with the United States to the full extent. Arab sources report that new oil alliance KSA/USA is based on the aspiration to freeze oil prices at the level of not above $60 a barrel for the decade.
“Russia’s willingness to join the alliance gives additional strength to it. Russia agrees on prices of not above $60 a barrel as it expects to compensate the loss of part of oil revenues at the expense of active export of food (mainly feed grain), weapons and new technological products which comes from the Russian side,” the source emphasized.
At that, prices of $60 a barrel satisfy US shale oilmen who due to the increase in oil prices up to $50 have increased the oil production by 125,000 bpd – a record increase. The KSA, having the lowest prime cost, is also ready for losses to be covered by foreign investments in high-tech industries of Malaysia and other related countries.
Indirectly, Russia’s accession to the KSA/USA alliance has been confirmed by the participation of Russian Energy Minister Alexander Novak at the CERAWeek energy conference in Houston (TX). There, Novak confirmed that Russia has no plans to join OPEC. He also pointed out that his Ministry, basing itself on the “rebalancing of the market”, predicts oil prices in 2017 in the range of $55-60 a barrel.
“Whether it is a good price or bad – the market judges about that first of all,” Novak said. In addition, he stated that Russian oil companies had lowered the cost of production to $10-15 a barrel.
“I want to say that Russia has large reserves of hydrocarbons: oil, gas and coal. In particular, today we have proven reserves of oil and gas for more than 50 years, and there is a huge potential for further hydrocarbons on the shelf, in the Arctic,” Novak added.
US oil companies have welcomed and appreciated the participation of Novak in CERAWeek. Thus, the KSA/USA/Russia cartel can be considered as practically established, and for today, all the three countries are world’s key oil producers (total production of 30-35 million bpd), according to the Azerbaijan Website ABC.AZ reporting from Baku.
In the meantime, the News Agency Trend, also reporting from Baku, says world oil prices went down during the first week of March, 2017 amid reports released by the Baker Hughes company indicating there was a growing number of drilling rigs in the US.
On March 6, 2017, the price of May futures for Brent crude oil dropped by 0.39 percent to $55.68 per barrel while the price of April futures for West Texas Intermediate (WTI) oil decreased by 0.47 percent when they stood at $53.08 per barrel.
The number of drilling rigs in the US increased by 0.27 percent and stood at 756 over the working week ending March 3, according to the Baker Hughes. Oil rigs have increased by 1.16 percent, while gas rigs decreased by 3.31 percent in the country during the week.
Another factor affecting the oil prices is the statistics on oil output in Russia. The average daily volume of oil production in the country increased in February by 1.9 percent per annum to 11.109 million barrels per day.
Russia has pledged to cut its oil output by 300,000 barrels per day from 11.247 million barrels per day in October 2016 to 10.947 million barrels per day during the first half of 2017. Audiovisual clip below on Russia-US relations picked from the British Daily Express.