Oil will cost (1) $ 20

Why will the price of the main product of Russia fall (or grow)?

The head of Rosneft Igor Sechin, in recent years, several times largely mistaken with forecasts at the cost of oil, decided not to answer such questions from journalists and advised me to contact the fortuneteller. Medusa made it a little differently-and read the reports of analysts and investment bankers for oil. It turned out that although most experts believe that oil will be cheap for at least several years, there are arguments in favor of the fact that it will sharply rise in price.

Why will oil cost $ 20?

China. The growth of China’s economy slows down, which means that oil consumption in the country will not be as large as expected a few years ago. The matter, however, is not only in China: all over the world, oil consumption is not too growing - GDP of many large economies does not increase at all from year to year, and here Europe and the United States are actively developing alternative energy, stimulating citizens to ride a bicycle, and not by car - in short, do everything to consume less oil. In such conditions, global oil demandis growing by one percent per year - the offer increases much faster.

Iran. Speaking of a sentence. If European and American sanctions really remove Iran, this country can sharply increase deliveries to the world market. There is no doubt that she will not wait or limit export to increase prices - Iran needs an influx of currency right now, the country lived for too long under sanctions. The World Bank believes that the relief of sanctions will immediately reduce the price of oil by $ 10 per barrel, and this is clearly not the limit. Oil production in the near future can recover in Libya - the country mines 70% less than under Muammar Gaddafi.

Russia. Another country that does not reduce production in the era of cheap oil. The official position of Russian oil recordings is to get as much as possible - and at least compensate for the drop in prices. For example, the same Rosneft directly says that he wants to increase prey -an influx of at least some money is better than a decrease in production and the expectation of high prices. This position of both Russia and other manufacturers creates a vicious circle - no one wants to voluntarily leave the market, as he is afraid that competitors will immediately replace it.

Saudi Arabia . The kingdom has been conducting a real “oil war” against the United States for the second year, or rather, against American oil companies engaged in the development of shale fields. It was the shale revolution, thanks to which the production in the United States has increased by 90 percent since 2008, which led to the fact that sales markets are reduced for Arabic oil. Slantsy oil has one significant difference from Arabic - it is expensive. Many deposits can be breaking out at a price of $ 60-80 per barrel, while Saudi Arabia is enough and even $ 10 per barrel. The idea of ​​the kingdom is to pump the market with oil, lower prices and bankrupt shale manufacturers. How real is it? The number of workers employed in the US oil industry has already begun to contract , but the volume of production in America is still growing . To “squeeze” the shale giants, Saudi Arabia may need a stronger reduction in prices. Judging by how fiercely the kingdom wages this war, it may well go even further. However, if Saudi Arabia manages to win, it will immediately begin to reduce prey - and prices will go up.

Why will oil cost $ 120?

OPEC. The position of Saudi Arabia, which is relatively easily experiencing low oil prices, does not like not all its partners in OPEC, the organization of oil exporters. Many of them have budgets at the rate of $ 80-100 per barrel, and now they are experiencing severe economic crises-to take the same Venezuela or Ecuador . If we assume that as a result of these crises in one or more countries, the authorities will change or (God forbid) armed clashes or war will begin, the cost of oil will immediately jump.

India. In the previous chapter, we wrote that global oil consumption is growing not at a high pace as experts predicted earlier. This is true, but there is one exception - India. In the coming years, it can take the title of the most dynamically developing economy from China, and therefore increase the volume of oil consumption. In 2016, consumption in India will grow by seven percent, and the country is clearly not going to stop there. From this point of view, it is too early to “bury” the growth of oil consumption. By the way, the same China in the coming months intends to increase oil reserves , while the prices for it are so low - this means that in the second half of 2016, demand may increase.

Non -standard situation. The oil market is experiencing one of the most acute crises over the past 45 years , and this is due not only to the balance of supply and demand, but also with exchange factors. The main one - many do not want to take risks and invest in potentially profitable, but dangerous assets, preferring to keep savings in dollars or, say, Japanese yen. As soon as the “bull” attitude returns to the market, it will touch the raw materials-and there is no doubt that it will ever return.

Dear dollar. If the price of oil in dollars falls, this may mean that the dollar is growing. Now for one euro in the market they give $ 1.11, a year ago - more than $ 1.3. The American currency contains the vast majority of oil contracts - as soon as the American currency begins to decline, and oil will become price - just to play losses in the foreign exchange market.