Translated material
Discipline is lame
OPEC countries have significantly exceeded quotas for the production of “black gold”
The largest hydrocarbon exporters, members of the OPEC cartel, exceeded the established quota for raw material production in July by 105 thousand barrels per day. According to analysts, such an excess has been observed for the fourth month in a row. The majority of experts interviewed by Vremya Novostei believe that the indiscipline of OPEC members will put additional pressure on oil prices, and some experts do not even rule out a rollback of prices to the level of $50 per barrel.The so-called disciplinary index, which records the compliance of quotas declared by the Organization of Petroleum Exporting Countries with the actual level of production, has dropped from 80% to 68% since the beginning of this year. Moreover, as analysts note, if Iraq, a member of the cartel, had also taken part in the quota system, the discipline indicator would have fallen even lower, since this country has been significantly increasing production volumes in recent months. Experts explain this trend by the desire to make money on increased demand. “The fact that OPEC countries began to export more is quite natural, since exporting states not included in the cartel also, despite any calls, continue to increase supplies. Why, in this situation, should OPEC, while incurring losses, maintain a favorable environment for, say, Norway or Russia? In the latter, by the way, despite the drop in production, exports are growing,” said Financial Bridge analyst Dmitry Alexandrov.
The fact that this trend will continue in the coming months is indicated, in particular, by the decision of the International Energy Agency to significantly increase the forecast for oil demand in 2009-2010. Thus, for this year the forecast was increased by 190 thousand barrels per day, to 83.9 million, and for next year - by 70 thousand, to 85.25 million. The IEA notes that the upward change in forecasts is due to mainly with the ever-increasing appetites of China. Just last month, China increased oil imports by 18%, to 19.6 million tons. In total, more than $13 billion was spent on the purchase of raw materials.
At the same time, experts believe that the desire of exporting countries to supply more and more, thereby exceeding established quotas, may ultimately hit them themselves. “Discipline plays a paramount role in setting hydrocarbon prices. For example, strict adherence to quotas by OPEC countries made it possible to avoid a continued fall in oil prices amid the crisis and stabilize the market. When discipline falls, trust in the cartel’s statements also falls, not to mention the increase in pressure on oil prices due to increased supply,” noted Veles Capital analyst Dmitry Lyutyagin. He also added that if demand from China gradually weakens, and it is not replaced by the purchasing interest of the United States and Europe, then oil prices may well adjust to the level of 50-55 dollars per barrel.
In the meantime, the opposite trend is observed in the oil market. Thus, yesterday on the New York Stock Exchange a barrel of oil added almost two dollars, rising above the level of $71. At the same time, analysts point out that there were no reasons for such growth. “On the contrary, published data on US oil reserves indicate that volumes were significantly higher than expected. The upward movement of quotes against the backdrop of such news can only be explained by the play of speculators, which the day before, also for no apparent reason, led to the same drop in the price of oil,” says Finam Investment Company analyst Alexander Eremin.