Oil prices have been rising on world markets today.
As of 9:27 PM MSK a barrel of Brent blend oil rose by 1.39% to $35.78.
The cost of WTI crude oil rose by 0.88% and reached the level of $33.36.
Recall that on February 16th Russia, Venezuela, Qatar and Saudi Arabia reached an agreement to freeze oil extraction. Soon they were supported by a number of other countries, including Iran.
A correspondent of Vestnik Kavkaza interviewed experts in order to find out their opinions about the cause of the increase in oil prices.
Senior Research Officer Ivan Kapitonov of the Energy Policy Sector at the RAS Economics Institute said that "it indicates some stabilization and growth prospects without any doubt." "It is possible that this is connected with the current agreement. However, it was not supported by the the US, which is why it is impossible to say that the physical market will move in the direction of the financial one. It's likely that now we are seeing an increase that will be replaced by the opposite trend," he said.
According to the expert, the price could go up to $60 a barrel. "This level won't allow the USA to produce much more. The oil price may increase to $60 in a year if the OPEC countries agree to reduce production. Not a fixation, but a reduction,'' Ivan Kapitonov said.
A sharp drop in prices to $30 may take place in case of "a failure of the agreements among these countries – if they don't keep the promises,'' he noted.
An analyst at Sberbank CIB, Valery Nesterov, urged not to reach hasty conclusions.
"Firstly, information changes every day. Tomorrow prices may again be $34 or $32. We have observed a slight increase. Secondly, we cannot say how much time it will last. It would be nice if the constant oil price was at the level of $40. But now I don't see such a possibility for the next couple of weeks. Thirdly, the Fitch rating agency published its estimate that the average price has significantly dropped to $36 if I am not mistaken,'' he said.
According to the expert, the agreement of the oil-producing countries should not be overestimated.
"It is unlikely that these agreements will be reached and fulfilled. It will be very difficult for us to reach agreement with Iran. It is almost impossible to agree so that Iran stops increasing its production. We could see during the last days that Oman entered peak production, so production is set to continue to grow. Tomorrow we will know information on production in Russia, but I think that we will increase our production too. Last month growth was 1.5%. In general, it's a long story," Nesterov commented.