After the Viennese ball

Two days after the next ministerial conference of the OPEC countries in Vienna, world oil prices managed to and take off to the annual maximums, and then to decrease to the maximums of only the last one or two months, and increase again. The decision to reduce production, adopted by the OPEC countries for the first time in the last eight years , if it is supported in the intended volumes and a number of other exporting countries, primarily Russia, theoretically will lead to a reduction in global oil production by almost 2%. But this is only theoretically.

The first market reaction to the results of the OPEC meeting in Vienna could seem relatively moderate. By the middle of the day on Thursday, Brent oil prices, to which the export prices of Russian oil Urals are also tied, increased to levels that did not reach even marked in early October. That is, shortly after the meeting of OPEC in Algeria, at which the current agreement was only announced - that these countries are in principle ready to reduce oil production. In such a situation, the expectation of the final agreement was quite high, and prices increased significantly, while the OPEC ministers still continued to confer in Vienna.

First of all, I must say that this reduction will not be! .. For two reasons.

Nevertheless, the first reaction to the official results of the conference was not very impressed. Why?

Alexey Kokin , oil market analyst from the Uralsib financial company:

- The “expectability” of the decision influenced, of course, to the market reaction. Moreover, a kind of “second round” of what was already in Algeria took place. After all, a fundamental agreement was reached two months ago. Now OPEC introduced the details of the agreement. It is approximately clear how much each country will have to reduce prey. However, the “white spots” remain in this agreement, namely, Libya and Nigeria, which are allowed to extract how much they can. In principle, we can talk about rather large additional volumes. And these several hundred thousand barrels per day are also a certain “cooling” market for the market.

Evgeny Weinberg , Head of the Somerzbank Analytical Department of the Analytical Department of the Analytical Management , Frankfurt:

- I do not think this reaction is moderate. Prices rose in just two days by almost 15%. And this is a very strong reaction. The agreement in Vienna still became quite unexpected for the market. And why is the price now, for example, not 60 or not $ 70 per barrel? Well, firstly, this is only an agreement that will act only from January. Yes, will the countries adhere to him or will not? To what extent will their actions lead to a reduction in the current excess of oil in the market ? - This is all unknown. Therefore, now the market is trading, of course, only on expectations. And these expectations are quite high.

The agreement of the OPEC countries suggests that they will reduce their production by 1.2 million barrels per day - this is a little more than 1% of global production. It is also expected that other oil producing countries will reduce their own production by another 600 thousand barrels per day, of which half will have to be in Russia. For her, taking into account all the features of current oil production in the country, the alleged reduction in its volumes, in fact, to the levels of the beginning of 2016, how, in principle, will be painless?

Mikhail Krutikhin , partner of the Rusenergy consulting agency :

- First of all, I must say that this reduction will not be! .. For two reasons. Russian Energy Minister Alexander Novak, announcing that Russia from the beginning of the next year intends to gradually reduce oil production for these 300 thousand barrels per day, made two significant reservations. The first - if the technical conditions allow, the second - if OPEC fulfills its own obligations. And the probability of both of both, in my opinion, is zero! ..

I can explain about the “technical conditions”. In order to reduce the current oil production in Russia by 300 thousand barrels per day, you need to disable about 4 thousand existing wells - if you focus on the average flow rate of the Russian well. And this is about 10% of all operating in the country. Secondly, the very policy of drilling and the operation of wells is determined not by the government, but by oil companies. The government has no tools to regulate the levels of production, consumption and export of oil. Therefore, this question is closed!

In the long run, OPEC, as an organization, does not matter! Of course, they are trying to show how important they are, that they say, they are able to control prices ...

The second reservation is associated with the “prospects” of the execution by the OPEC countries of their own decisions ...

- The intention of OPEC is somehow not “consistent” with the previous history of this organization. If we look at the graphs, starting in 1994, we will see that annually a quota for prey, which was determined by OPEC itself, has never been observed during this period. All the time its participants produced more oil than they “supposed”. And therefore, to expect that now someone will suddenly “give in” his market niche to someone else is not worth it. Therefore, it seems to me, in general, the consequences for the oil industry of the “declaration” adopted in Vienna will be minimal.

If we proceed from the fact that today the total exceeding the supply of oil in the world over real demand for it is more than 1 million barrels per day, then plans to reduce production by 1.8 million barrels (1.2 million-OPEC countries + 0.6 million-the countries of non-mesh) overlap this excess proposal with a large reserve, almost half. At least theoretically ... however, there are also huge reserves of already extracted oil in the world , which also affect the dynamics of prices. To what extent this factor, according to your ideas, can be laid down in them now, after the OPEC decision?

Alexey Kokin:

- Well, this factor is very significant, but not long -term. With strict adherence to agreements, if production is really reduced, say, 1.8 million or at least 1.5 million barrels per day, these accumulated reserves are gradually depleted - say, by the end of 2017. It is enough to recall the recent report of the International Energy Agency, which indicated that if the quotas are installed, it will occur quite fast, within 6-12 months, “balance” of the market. Even despite all these accumulated reserves. However, there are factors that can slow down this process. We do not yet know how to agree with other oil producers. But even the OPEC itself, even after the agreement, remains the potential for production growth - in Libya and Nigeria. That is, the reduction of prey in general can be much less - maybe it will be only about a million barrels. And then the process of “balancing” demand and supply of oil will slow down greatly.

And do not forget that since January in the United States there will be a new president who is very “friendly” to the Slantsevaya oil industry in the country.

In many publications on the topic of the OPEC meeting, assumptions were made that the current agreement became possible after the mutual mitigation of the positions of the two largest OPEC participants - Saudi Arabia and Iran, long -standing geopolitical opponents. That, they say, the money is acutely necessary for the budgets of both countries, not to mention some other OPEC countries, where the budget situation is even worse. To what extent do you share such grades?

Evgeny Weinberg:

- No, no agreement happened between these countries. After all, what Saudi Arabia expected - abbreviations, or at least “freezing” of Iran, did not occur. Saudi Arabia was more interested in this agreement than any other country. Firstly, of course, they wanted to “save face”, because this time the agreement was initiated precisely by Saudi Arabia . Secondly, it seems that her own short-term interests parted with long-term, since the country preferred a tit in the hands of a crane in the sky. After all, it is unambiguous: a decision made in Vienna, although in the short term and can increase prices to $ 55 or even $ 60 per barrel, in the long run is very dangerous for OPEC itself. And the probability that after some time prices will move again towards $ 40, now only increased. Indeed, with the prices of oil production in the countries of non-mesh, first of all, the shale in the USA, which have grown up on this OPEC, will increase, of course, will increase.

The intention of OPEC is somehow not “consistent” with the previous history of this organization. All the time its participants produced more oil than they “supposed”. And therefore, to expect that now someone will suddenly “give in” their market niche to another is not worth it.

Due to the fallen oil prices in all production countries in the past two years, a sharp reduction in investment in the oil industry, including in Russia, has been noted. However, is it possible to assume that the negative impact of this factor will now soften if the total prey in the country is really reduced? Or is one not much connected with the other?

Mikhail Krutikhin:

- I think that one is not much connected with the other ... Here, say, it is expected that reduction in production will lead to an increase in oil prices, which will favorably affect investments in new Russian production projects. But we turn to simple arithmetic. At the price of oil of $ 40 per barrel from an oil company working in Russia after the seizure of two main taxes - $ 21 will remain for mining and export duties. And at a price of $ 50 per barrel, an oil company will have ... $ 22! That is, almost all the “superfluous” that the country can get in the form of additional revenues from increasing the price of oil will go to the state treasury, and not to the oil company. Therefore, the oil companies themselves are the expected increase in price because of the Vienna Declaration is absolutely indifferent!

That is, a really reduction in production can be much less - and then the process of “balancing” demand and supply of oil in the world will slow down greatly.

According to your ideas, the main fears of oil producing countries for the near future can be associated with inevitable growth, against the background of raising prices, shale oil production in the United States? Although, it seems, no one knows for sure at what exactly the price levels the sharp increase in this booty will begin ... or rather, with a sharp reduction in investment in the industry over the past two years, which will inevitably affect the future prey?

Alexey Kokin:

- With Slens, I think the fears are connected for the next year. Whereas a longer long -term perspective, the problem of the decline in investment may be more important. The reduction in shale production in the United States from its recent peak was only about 10%. And we understand, somewhere between 50 and 60 dollars per barrel and there is the threshold behind which is likely to be a massive resumption of shale production in “frozen” wells . Moreover, so many in the industry are afraid that such activation can occur at prices and below $ 55. Indeed, during the time, which has passed with the recent peak of this booty, that is, a year and a half, American technologies have clearly advanced.

Evgeny Weinberg:

- Well, why - “no one knows”? We quite imagine these “threshold” prices for shale production in the United States. According to our estimates, at a price of $ 40 per barrel WTI, this booty will not grow, but rather stagnate or even fall. At a price of $ 50, its growth will resume. And at prices higher, it will accelerate. And do not forget that since January in the United States there will be a new president who is very “friendly” to the Slantsevaya oil industry in the country. And all this, taken together, and even against the backdrop of a slightly rising world prices, can lead to a sharp jump in shale production in the United States. And we, I think, will have to reduce our long -term expectations for oil prices.

That is, almost all the “superfluous” that the country can get in the form of additional revenues from increasing the price of oil will go to the state treasury, and not to the oil company. Therefore, the expected increase in price over the Vienna "declaration" is absolutely indifferent!.

Let us explain the barrel of American oil of the WTI variety costs about $ 50, that is, 3 dollars less than a barrel of the Brent variety oil ... and just about the expectations: from what forecasts for oil prices Brent either by the end of 2017, or the Middle for the entire coming year, are you coming now, after an agreement of the OPEC countries? And - why?

Evgeny Weinberg:

- In the long run, OPEC, as an organization, does not matter! Of course, they are now trying to show how important they are, that they say they are able to control prices ... But such a reaction of the resolution market can be caused only for a month or two, well, even for six months. In the long run, OPEC simply does not need OPEC! .. The company now became the new “decisive” manufacturers of the shale oil companies in the United States. They will determine the price of oil in the long run, and not OPEC! Therefore, oil producing countries will just have to come to terms with the fact that oil prices in the long run will be limited, perhaps, $ 60 per barrel, and not 100-120 dollars, as it was more recently. And about prices in 2017 - most likely, in the first half of the year, Brent will cost more than $ 50 per barrel, and in the second - less than $ 50. Although we just recently assumed the growth of this price to $ 55 by the end of next year - before the agreement was reached in Vienna.

Alexey Kokin:

-I get out of rather pessimistic forecasts and expectations ... But if you really 1.8 million barrels per day “leaves” from the market, and there will not be some improvements in Libya, Nigeria or in some countries that could suddenly “throw” significant volumes of oil to the market, I fully allow levels of 55-60 dollars to the end of 2017 years. I think that - not higher. And it is precisely because of the shale oil factor!

But I myself believe that with a high probability there will be an increase in extraction in at least one of the named countries of Africa and that, let’s say, not a very honest “game” from some other oil producers is possible. Well, you yourself understand, some of them were simply in a desperate financial situation ... I assume that Russia, if signed under this agreement, will fulfill it. Like Saudi Arabia, probably. But the obligations of these two countries to reduce production, combined, are only less than 1 million barrels per day, which we can somehow count on. And in such a situation, it seems to me, a landmark for the average price in 2017 - levels of about $ 50 per barrel. By the end of the year, perhaps, a little more than 50 dollars.

Mikhail Krutikhin:

- Recall, both in 2015 and in 2016, the average price of Brent oil was approximately $ 45 per barrel. Given the dynamics of the demand and supply of oil, in 2017, according to my estimates, the average price should remain approximately the same. Or even less , since recent data on the potential of demand in this market do not cause optimism. Of these, in particular, in China, demand will not be as expected in China, and in India ... while the oil supply in the world will increase. Therefore, the same $ 45 per barrel as the average price for 2017 is also an optimistic assessment.