Igor Yushkov, one of the leading analysts of the National Energy Security Fund (FNEB), told socialbites.ca that fuel prices will increase after the OPEC+ countries announced the voluntary cut in oil production. According to him, this will be a “psychological reaction” of the market, which does not expect changes in production volumes.
“I really think there will be an increase in prices, that prices will go up. This will be a psychological reaction of the market because before that there was no information that OPEC+ countries were planning to make any changes in their production volumes. So, this is an unexpected announcement for the market, and we’re not talking about the fact that production quotas within OPEC+ will be lowered here, but rather a real reduction in production volumes because only a few states fulfill quotas within OPEC+. The rest don’t even get as much as the quotas allow. Therefore, if quotas are reduced, it actually means that production volumes will decrease much less than the announced quota reductions. And here we see that it is precisely these countries that are talking about voluntary cuts that meet quotas that can really produce a lot. And they reduce their actual production. Therefore, this will really affect the market, remove some of the oil volumes in the market and accordingly push prices up,” he said.
Yushkov noted that in the long run, the decision of the OPEC+ countries will “play a stabilizing role for the market”. According to him, after the price of “polychoradit” it will consolidate “around $80 per barrel”.
Previously, it was learned that Saudi Arabia volunteered. will reduce oil production of 500,000 barrels per day until the end of the year. In addition, fuel production from May to the end of 2023 will reduce Iraq, Kuwait and Oman.
In turn, Deputy Prime Minister of Russia Alexander Novak knowledgeableAs a preventive measure against the situation on the world market, Russia voluntarily extends its oil production by 500,000 barrels per day until the end of 2023.