The price of Brent in November fell by almost 22%, the biggest decline in the last ten years. The same situation with quotations of WTI, Texas.
Oil is going up rapidly — after shaking the hand of Vladimir Putin and Mohammed bin Salman in Argentina. The Russian leader and the crown Prince of Saudi Arabia spoke at the G20 summit, but the most revealing was that Putin and Salman greeted each other in a friendly manner, giving five, with a smile. All this in the presence of Donald trump.
The video surpassed all the world TV channels and social networks. British newspaper the Daily Mail called the handshake a "very extravagant".
And now oil prices are rising, although just before the summit showed a record monthly decline since 2008. Brent fell nearly 22%. The same quotes Texas WTI.
The market is waiting for a coordinated production cut to stabilize the oversupplied market, Reuters reported with reference to analysts of Fitch Solutions. Commenting on the results of the meeting with the crown Prince, Vladimir Putin said they agreed to extend the period of the transaction OPEC+. This week will be a meeting of OPEC+, which will take a final decision on oil production.
The reason for the drop is simple: production is growing. It increased OPEC+, such as Saudi Arabia and Russia, and the United States and does set an absolute record. Plus suddenly all the participants very much recovered production in Libya.
See also:will it be Possible to keep the price of gasoline and what will happen after March 31?Adding fuel to the fire report, which was released by OPEC. It says that demand next year will not grow as rapidly due to global slowdown of the world economy, in particular due to the slowdown in China's economy.
As a result, the November crude oil has fallen in price by more than 20%. Despite the decline, the current level of prices suits Russia, but I would like, of course, that he was above. The probability that in December, OPEC+ agree, rather big, says investment analyst UFG Wealth Management Eugene Bandrowski and adds how the situation will affect the Russian budget:
Eugene Understimulation analyst UFG Wealth Management"Are estimates of what OPEC to reduce production by 1.3 million barrels per day. I think that's about the level of which in fact they agree, for the simple reason that all have become accustomed to high oil prices and do not want to give profit, which is embedded in the budgets of the countries. Otherwise, oil may fall another. The Russian budget is now in surplus when the price of oil, it is embedded in the region of 40 dollars per barrel, all of the funds that the budget was received too recently went to replenish the reserve funds. Accordingly, the budget is executed without any problems even at the current level given the fact that the ruble became almost indifferent to the price of oil."
Indeed, the ruble is kept at the same values as in August, despite the impressive fall in oil prices. This allows oil companies to recoup their costs, and budget — to fulfill their obligations.
But a logical question arises: can you see end-users the reduction of gasoline prices in response to falling oil prices? A strong decline in retail to not count, because very large losses accumulated during the period of price fixing, says the General Director of noncommercial partnership "Council of commodity markets", the General Director of trading company "solid — Commodity markets" Ilya Moroz:
Ilya Morosely Director of the nonprofit partnership "Council of commodity markets", the General Director of trading company "solid — the Commodity markets""Completely to fix not be reduced, provided that the goods in the domestic market will be sufficient, will not succeed. After all, if the product reaches the market, prices will be reduced. Of course, the increase in the tax burden from the beginning of next year and VAT and increased excise tax in half, of course, will interfere with this process. If the decline will be, it will be limited increase in tax burden".
Amazing stability: the end user should just accept the fact that gasoline prices to fall can't.
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