Physical balance between supply and demand on the global oil market is now close to equal, Associate Professor of RANHiGS Ivan Kapitonov and Associate Professor of the Stock Markets and Financial Engineering department of the Faculty of Finance and Banking of RANHiGS Sergey Hestanov stated in an interview to Vestnik Kavkaza. Both experts also warned that now the influence on oil prices will return to speculators.
Today, oil prices continued their growth, Brent oil once again raised above $50 per barrel, reaching the level of $50.72, and WTI reached $49.85. According to analysts, it happened after the publication of positive forecast by the chairman of the Department of Economic Development of Abu Dhabi Ali Majid al-Mansouri, who stressed that the oil market is actively recovering, so prices may reach $60 per barrel this year.
Ivan Kapitonov was the first to point out actual existence of balance between supply and demand on the physical level. "Right now we can say that physical market has stabilized in one way or another. However, at the same time we see fluctuations in price situation. They can be explained by the informational factors. For example, after failed negotiations in Doha, there were some positive messages: a certain disinformation by the Americans, in particular, Bloomberg agency provided incorrect information on the US reserves, then real information about the strikes of workers in Kuwait, where production decreased by 1 million barrels per day, which was presented by the US agencies as the factor that should push the market up," the expert gave several examples.
Similarly, speculators used and use other events in order to raise the oil quotations. "In particular, events related to fire in Alberta - physically, production decreased by 1 million barrels per day, but it was heavy oil, it was already hard to sell it at such low prices. These fires could not seriously affect physical oil market, especially since Saudi Arabia repeatedly stated that it is ready to easily increase the oil production by 1 million barrels per day. So everything that we are currently seeing are just financial games and the consequences of those financial games that are happening on the market," he warned.
Ivan Kapitonov doubts that oil will be able to rise above $50 per barrel. "Will the price above $50 per barrel stable is a big question, since the main goal set by Saudi Arabia and OPEC countries - to oust the US from oil production, has not been achieved yet. I guess that soon there will be another collapse, and quite a serious one," he expects.
Sergey Hestanov predicts that a true stabilization of the market will happen in November-December of 2016.
At the same time, what we are seeing now may be just a deceiving calmness on the market. "On the one hand, the oil price truly increased, reaching the level of $50 per barrel, but on the other hand, I would not hurry to make far-reaching conclusions, because the oil market always managed to surprise us," he concluded.
