The normalization in oil prices, which OPEC has postponed the idea to freeze the production is very slim. Soon supply will exceed demand for the market, it faces a new great shock. This position was expressed by the Vice-President of the research centre for energy and environment at the University of North Dakota John Harju. His words leads RIA Novosti.
According to the expert, “curves of demand and supply on a collision course, and when these curves intersect, it would be a painful shot, not the long-awaited rise of the market.”
We will remind, the day before the Organization of countries-exporters of oil and are unable to negotiate changes constantly violate their own quotas on oil production, nor about the prospect of freezing this level.
Over the past two years, oil prices fell by more than tripled — from 115 to 36 dollars per barrel mark Brent. This year, the cost of the barrel even dropped below $ 30. The decline was explained by a high level of production in the world with a small demand, including because of the situation in China.
With the beginning of the year major oil producers COSL sat down for talks to discuss freezing production at the level of January 2016. It was supposed to stabilize the market, to balance supply and demand. But the talks in February and April stalled and came to nothing lead.
Last week the market began to stabilize. The price for Brent crude for the first time since November 4, 2015 rose to $ 50 per barrel. And the barrel of WTI reached the same level for the first time since October 12, 2015.
Experts explain this situation by the interruption of oil supplies from Canada and Nigeria. That is why most of them felt that at the meeting on 2 June OPEC countries-oil producers will not agree to freeze production.
