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Next year will bring high oil prices and a cheap dollar

Следующий год принесет дорогую нефть и дешевый доллар

Experts continue to argue about the short and medium term future price of black gold. And their forecasts are not so pessimistic, as it was until recently.

As stated in an interview with Bloomberg TV, the CEO of major oil trader Vitol Group Ian Taylor, the end of the year the price of Brent crude far from their present values.

At the same time, the expert sees no reason for further fall and the return to multi-year lows of $27 per barrel, reached in January of this year. On the contrary, by the end of 2017 the price of a barrel could rise to $60, he said.

According to Taylor, the growth of prices in the first half of the year contributed to stronger-than-expected demand growth. In the second half of the year demand growth will be less, the expert believes. At issue is byambabazi and shale oil in the United States, which reached the bottom, and it is too early to talk about whether to resume growth. According to Vitol Group, the current period in the global oil market can be compared to a long period of depression similar to the downturn from 1986 to 1999. A quick recovery of prices, as happened after the crisis of 2008, according to the expert should not wait.

Meanwhile, such prospects are not very confused leading players in the oil market. On the contrary, many of them prefer to take advantage of the situation when the oil and oil assets are relatively inexpensive, and make investments.

So, the biggest oil companies Chevron, ExxonMobil and their partners are investing $36,8 billion in the Tengiz field in Kazakhstan. Despite the frozen oil market, the investment will be aimed at increasing oil production. According to The Wall Street Journal (WSJ), this is the largest investment in oil production after the recent collapse of two years ago. It is expected that the company will invest $27.1 billion in oilfield equipment, $3.5 billion in new wells, and $6.2 billion will provide for contingencies. “This moment is the perfect time for investment,” the WSJ quoted head of Chevron in Eurasia and the middle East, Todd levy.

These events, according to experts, can mean a change in relation to the forecasts of the oil market. The assumption that oil prices will only fall, not confirmed. Rather, they believe, expect the opposite scenario, though not fast as it was before.

Investment in the Tengiz field, mark a “point of inflection of the trend,” the WSJ quotes the words of a senior oil analyst at investment firm Jefferies Jason Gammel. According to him, this is the first investment project in the oil industry this year, worth more than $10 billion Since the fall of oil prices from $115 per barrel in mid-2014, the big players were forced to reduce expenditures and cut staff. Today the situation seems to be changing.

It is noteworthy that these changes occur not because of any significant movement in the market black gold. On the contrary, its value will be determined not by the oil factors.

“I think we’ll see oil prices below current levels in the first quarter of next year, after which it will go good rise to $60 per barrel and higher,” says financial analyst Dmitry Golubovsky. – The driver of growth will continue to be cheap money”.

Indeed, experts have long noted that oil stock asset, has long ceased to be a commodity, becoming in fact a financial asset. For this reason, every year it is increasingly possible to say that a decisive influence on the price of a barrel have not the cost of production and the OPEC decision, and the situation in global financial markets and global health the most important financial instrument of the U.S. dollar.

As for the latter, in the foreseeable future to wait for his strengthening is not necessary. Publicized at the time, the U.S. Federal reserve interest rate hike remains in question. This means that in the foreseeable future, the dollar is unlikely to strengthen its position.

“Now the probability of a rate cut in the autumn is estimated futures is higher than the probability of increase,” – says Dmitry Golubovsky. Given that the price of the dollar and oil for many years go out of phase, special occasion to lower the cost of a barrel no longer in sight. Rather, it is appropriate to talk about the resumption of a small increase in oil prices by the end of this year.

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