Analysts say Russia will continue participating in OPEC oil cut deal
Russia will continue participating in the OPEC deal on oil production limiting despite dissatisfaction with the current prices level, analysts questioned by TASS said.
The desire was to reach the oil price of $55-60 per barrel but the combination of factors does not provide such an opportunity so far, Russia’s Deputy Prime Minister Arkady Dvorkovich said last week. Action was nevertheless proper and the situation is better than before, he added.
“If the agreement is not renewed in any way, oil prices will most likely go down because we will concurrently have production growth in the United States, in OPEC countries, mainly in Saudi Arabia, and production growth in Russia,” analyst of Raiffeisenbank Andrei Polischuk says. “We will experience all that in a short period of time – during the second half of 2017,” he adds.
Russia’s refusal to take part in the oil production limiting agreement “can adversely affect the whole deal,” analyst of the Bank of America Merrill Lynch Karen Kostanyan says. “Saudi Arabia will not be ready to maintain prices at its expense only,” Polischuk adds.
If the agreement is not renewed, oil prices may drop to $40 and even $30 per barrel, experts say.
Nevertheless, Russia will try to simultaneously participate in cooperation with the OPEC and keep its share in world’s oil production, Finam analyst Alexei Kalachev says. “We will proactively participate in this matter; we will not slam out and will not interrupt this process because we are interested in keeping the price. On the other part, we will always use any opportunity not to reduce the price,” he says.
Russia is not discussing an option of withdrawing from the deal and has not expressed dissatisfaction with its results, an OPEC source told TASS earlier today.