The question of what will happen to oil is of interest to a fairly large percentage of the world's population. The increased interest in the pricing of “black gold” is explained by their influence not only on the economies of many countries, but also on the world economy as a whole.
2014 prices
In the second half of 2014, the cost of raw materials was at the level of 110 dollars, which perfectly suited not only Russia but also other fuel exporting countries. The budget of Russia was replenished due to the active activities of the largest oil producing enterprises, in particular, such as Gazprom. Oil grew in price until the middle of summer 2014 and reached its peak at around 115 dollars. A similar situation developed in the USA, in the OPEC countries and in some European countries. From the end of summer 2014 to the end of December, the whole world observed a rapid drop in oil prices, which reached the level of $ 60. By the end of winter, a multi-year low was recorded at around $ 48. At that time, even world experts could not say with partial certainty what would happen to oil in the near future, since all forecasts made the day before were almost completely erroneous.
Factors Stimulating Oil Drop, and Their Impact Now
Trying to make a forecast for the future, many experts are repelled by factors that, in their opinion, led to a drop in prices. We can talk about the following points:
- Reducing global economic growth. EU countries and China have stalled in development, Japan is in recession. State industry requires less fuel, which leads to a sharp reduction in demand. A large amount of fuel and little interest in it stimulate a fall in prices. Experts predict a slight improvement by the end of 2015.
- Starting in September 2014, OPEC countries have significantly increased the amount of fuel produced to 30.5 million barrels. Saudi Arabia has officially announced that it does not intend to reduce quotas for the extraction of “black gold” even if its value on the world market is only $ 20.
- The growth of oil production in the United States to the level of 8.9 million barrels.
- Greater competition has become the basis for discounts on fuel purchases. In the fierce struggle for the consumer in 2015, such countries as Qatar and Iran, Saudi Arabia agreed to give in price.
- Total carbon demand is declining due to the development of energy-saving technologies in Europe. The trend in the coming decades will not change.
If we take into account all the factors together, then they say that by the end of 2015 the situation on the world oil market will not return to its previous course. Most experts indicate an increase in the cost of fuel to a level of $ 75. On May 5, 2015, a price of $ 70 was recorded on the market.
Oil prices in 2015, taking into account decisions of national governments
Many experts, trying to make a forecast as to what will happen to oil this year, rely solely on the decisions of the governments of the countries participating in the world oil market. The budget of Saudi Arabia was compiled taking into account the fact that the cost of a barrel of oil does not fall below the 2014 figures. Based on this, many experts have relied on the fact that throughout 2015 fuel will be traded at $ 99. After the collapse of the market, the country's budget was completely revised. The rate was placed at $ 60 per barrel of oil. The field of official publication of budgets began to appear forecasts that in 2015 the price of fuel would not exceed the price mark of $ 65. This link to Saudi Arabia is due to the fact that the state is the leader of a cartel called OPEC.
What did they talk about at the international conference in April 2015?
In April 2015, an international conference was held on the territory of Texas, in the framework of which issues related to oil were actively discussed. In a speech by the head of the Lukoil company, words were heard that fuel prices would no longer creep down. Businessman Vagit Alekperov noted the fact of reaching and breaking through the prices of his historical minimum, which directly testified to the unlikely continuation of the trend. According to Goldman Sachs analyst Jeff Kerry, prices went down in the first half of 2015 due to the publication of poor forecasts for the third quarter of 2015. To the premises of the phenomenon, he attributes an extremely sharp increase in the US dollar. Jeff focuses on the fact that the situation has stabilized a bit. His opinion was fully agreed by Juha Kakhenyan, who holds the post of deputy director of the IMF in Asia and the Middle East. Both experts are inclined to a further increase in prices, which was also predicted by the IMF. Recall that at the end of August 2014, specialists focused on the cost of oil by the end of 2015 within 99 dollars.
Second side of the coin
Considering the question of what will happen to oil in the future, it does not agree with the opinion of Kakhenyan and Kerry, and also refutes the IMF forecast Aidar Kozybaev, a representative of the National Bank of Kazakhstan. He says that world oil will not be able to stay at around $ 99 in the near future, moreover, it will not even reach this level. The economist is betting on $ 85 a barrel for Brent oil and $ 75 a barrel for WITI oil . The specialist bases his assumptions on the strong influence of the situation in Russia on such countries as Azerbaijan and Uzbekistan, Kazakhstan and Turkmenistan, which are importing states. The oversupply of oil caused a fall in prices, and the spring stabilization of the situation in a number of countries significantly affected the restoration of the price level. In the future, the trend will continue, despite the fact that the maximum of 2014 (105 - 110 dollars per barrel) can not be reached.
The most shocking forecasts of 2014: the market against the state budget
Back in 2014, the most frightening forecast, which was considered only by some global analysts, including Russian ones, was the one according to which oil quotes would drop to $ 60. For the most part, experts agreed with the price of “black gold” in 2015 at $ 90. A less stressful scenario implied a decrease in Urals oil to $ 91 in 2015 and to $ 90 during 2016 - 2017. Presumably, this was supposed to lead to a decrease in GDP in 2015 to the level of 0.6% with a recovery to the level of 1.7 - 2.8% already in 2016 - 2017. The whole world was watching how the situation unfolded in fact (falling below the level of $ 49 per barrel in January). The oil market behaved in an unpredictable way.
Where to look for the truth?
All forecasts that analysts are able to give today vary in a wide range: from incredibly optimistic to stressful. OPEC countries that do not intend to reduce fuel quotas are considering a scenario with falling prices to $ 20, as they say that in this situation they will not change their tactics. The IMF is confidently looking to the future and believes that by the end of 2015, oil quotes will please with values ranging from 90 to 99 dollars. Most market participants simply monitor the situation and avoid important decisions. We can say that the truth is located somewhere in the middle, as evidenced by the situation on the market today. Despite the fact that oil production in countries has not changed over the past 3-4 months, the cost of fuel has leveled off a bit. So, as of mid-June 2015, the Brent brand is at a level close to $ 65 per barrel, while the level of $ 70 per barrel was tested.
Statistics for the months of 2015
So, where will the oil market go in the future? Studying fundamental factors, many experts say about the same thing. Oil export in many countries will remain unchanged until the end of 2015, which gives good reason to talk about the following values:
- In early June, oil prices averaged $ 66; at the end of the month, it will stop at $ 69. A forecast of a maximum of $ 76 and a minimum of $ 60. Mirror peaks have not yet been reached in the first two weeks of June.
- July predict more promising. It will start at around $ 69 and end with a price of $ 72. The maximum and minimum will be at the levels of 77 dollars and 61 dollars. The average price is 71 dollars.
- From September to December, the price range, despite the fact that oil production by country can be redistributed due to the development of resource deposits in Russia in the Arctic and the intensification of projects in the United States, will vary from $ 55 to $ 77.
What awaits the global market in 2016 - 2017?
The far from stable world situation does not prevent major global analysts, including Gazprom representatives, from considering oil and its movement not only in the near future, but also in the long term. Comparing numerous forecasts, we can say that during 2016 there will be no catastrophic market drops. On the contrary, the situation will continue to improve. Experts recommend starting from a minimum of $ 68 in January and expect a maximum of $ 105 in December. In 2017, the situation will not change. In March, April and May, a reduction to $ 63 per barrel is possible with a further recovery to $ 102 in June.
The latest forecast from the Ministry of Economic Development of Russia
The Ministry of Economic Development of Russia is set to reduce oil prices by 10% in 2016. The toughest forecast speaks for a price of $ 50 by the end of 2015. A comprehensive restoration of the price range of the end of summer 2014 is expected in 2018, but not earlier. A document with information was presented to the public on April 10, 2015, while its change and modernization is planned, adaptation to the situation in the near future. The world-class economy may leave its mark on the direction in which the price of oil will go at any time, especially if we take into account the redistribution of shares in the international oil market. It is not worth adhering to one of the officially published opinions, as events that can occur in the world will correct the situation with interest. Large world oil producing companies, such as Gazprom, are not able to direct oil in the right direction. It remains only to follow the events in the world. With their consideration, it is possible to some extent explain how oil quotes will be formed.