Oil: prediction of the rebound

Fatih Birol, Executive Director of the International Energy Agency (IEA), believes that if the growth of the global economy is not slowing down at the near future, then the “bottom” of oil prices has already been completed. He stated this at the G7 summit in Japan, communicating with Reuters correspondent.

“It may be that prices have reached the bottom, but it will depend on how the world economy will feel. During a normal environment in the economy, we believe that prices will more likely move up than down, ”Faih Birol said. “We believe that in normal conditions by the end of the year, in the second half of the year, the latest in 2017 on the market will be rebalanced,” he emphasized.

There really is an occasion for optimism. On Friday, April 29, the Brent barrel has risen up to $ 48.5, this is a maximum of 2016. That is, in a few months, oil rose by $ 20 (at some point they gave less than $ 30 for a barrel). This happened against the backdrop of the weakening of the American currency - the Fed does not want to increase the refinancing rate fearing and so weak economic growth.

The instability in Kuwait, where the petition of the oil workers, and Nigeria, were also held, also influenced the exchange, where the war of the Central Government with the Islamists flashes somewhere.

At the same time, it is clear that the lower the price of oil, the less profitable to invest in exploration, production and development of new technologies. Sometimes the price of oil even turns out to be lower than the cost, so that a continuation of production at long -developed deposits is called into question. Ultimately, all these factors lead to a decline in prey, reduction in supply and price growth.

Such “waves” could stop working after the start of mass production in the United States of Shythm oil and gas. The fact is that on classic towers and sea platforms, freezing and increasing production is a technologically very complex process. For example, Iran, who, after lifting the sanctions, received the right to export his oil to anywhere in the planet, will be able to achieve the dosanction levels of production only by 2017. And the prey in the shale deposits, if work has already begun on them, can be reduced and increased without prejudice to production quickly enough.

In fact, it turned out that everything is not so simple. Oil production in the United States is now at the lowest level since 2014. Including, due to the fall of production in the United States, it is expected that in the II quarter of 2016, for the first time in more than 3 years, an oil production decline will be recorded.

Birol believes that about a year of high oil prices is needed, for $ 60 to turn the trend for a drop in shale oil production. For the Russian budget, this is, in general, a positive forecast: it means that at least in the next months you can not expect a sharp decrease in oil prices. On the other hand, the prediction, even if the heads of the International Energy Agency may not come true, the oil market is very well known that its behavior is poorly predictable.