The US Department of Energy (EIA) has recently announced its forecasts for world oil prices in the next two years. Against the background of the fact that the leading oil producers in the world are trying to agree on a certain "frozen" level of production in order to stabilize prices, and the fact that raw material prices rose to about $40 per barrel in the last few days, the Energy Information Administration of the US Department of Energy published a report predicting that the average price for Brent will be $34.28 a barrel this year and $40 in 2017. Moreover, these estimates are even lower than previous forecasts of the ministry – $3 and $10 per barrel respectively.
According to American analysts, there is such a lot of oil in the market that the United States is expecting low prices in 2016, even taking into account the fact that America will reduce production itself this year by 700,000 barrels to 8.7 million barrels a day. In the future, America will reduce the production of shale oil by 500,000 barrels to 8.2 million barrels a day, but the price of WTI will rise by only $6, to $40 a barrel.
The pragmatism of the US estimates is based on a disbelief in a "gentleman's agreement" on the level of an oil freeze to restore oil production levels that were agreed by Russia, Saudi Arabia, Venezuela and Qatar. However, analysts believe that the forecasts of US power industry are underestimates and doubt the ability of the new oil cartel to restrain the production levels of the "black gold" are greatly exaggerated.
"Predictions are always ambiguous: one predicts based on one's own interests. Therefore I believe that this is clearly an understated figure." The president of the Union of Oil and Gas Producers of Russia Gennady Schmal said in an interview with a correspondent of Vestnik Kavkaza.
"In my opinion, at the end of the year the price will reach $40-45 and next year probably $50 per barrel. Everything will depend on many factors. Firstly, the United States has recently reduced the volume of oil production. It affected the price, which as you can see is at the level of about $40 a barrel. I believe that this prediction is unlikely: many countries, as well as OPEC, have realized that it is necessary to consider how to influence an increase in prices, which is to be higher soon in comparison with the price, announced by the United States today," the expert said.
Sberbank CIB analyst Valery Nesterov also considers that such a pessimistic assessment by the US Department of Energy is related to the fact that forecasters are now divided into two groups: those who are more optimistic and see the price of this year at the level of $40-45, and those who believe that nothing has happened that can affect the imbalance of supply and demand, and it still persists.
"Almost every day we receive a flow of information. Tomorrow Goldman Sachs, the Russian Ministry of Energy and Ministry of Economic Development will announce other estimates. In principle, this pessimistic view was caused by an imbalance of supply and demand, although it decreased by nearly 2 million barrels per day. Certainly, it was taken into account to a certain extent and the forecast of the International Energy Agency. It is believed that the market will become more or less balanced by the end of 2017. This balance will give a stable oil price and reduce volatility, as long as the oil price is very volatile. We see how it is now rising, we know that the cause is a circumstantial reduction of US reserves and expectations of speculators, or simply speculating on the fact that they the main exporters can gather and determine the price of oil at the level of $40-50," the expert said.
