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The Saudis are preparing to put pressure on other OPEC members

Саудиты готовятся надавить на других членов ОПЕК

Saudi Arabia has been fighting with other OPEC members, since the fall in oil prices two years ago.

And soon the Kingdom will be able to prove that his strategy to oust competitors from the market quite successful.

Squeeze all the key players, the Saudis were able to almost completely eliminate the global oversupply, triggering a rally in oil prices: a barrel has risen since the beginning of the year 80% up to $50. All but one of the 27 analysts surveyed by Bloomberg, said that OPEC is likely to stick to the development strategy, not to cut production. For a discussion of this strategy will be held in Vienna on 2 June.

“We can not say that this was a great achievement, given that oil cost $100 per barrel, but Saudi strategy works, because there was a significant decline in oil production,” said Seth Kleinman of Citigroup Inc.

Lower prices impact on manufacturing from the US to Nigeria. Analysts from IEA to Goldman Sachs Group Inc. claim that the oil market is close to stabilizing, as the excessive amounts of raw materials gradually disappear.

The history of the issue

June 2 will be the next OPEC meeting, which will not be a standard dispute between Saudi Arabia and Iran. Oil-producing cartel will have to decide how to cope with all the problems.

The meeting will take place against the background of growth of prices to around $50 per barrel. While production in Nigeria has decreased dramatically due to attacks by armed rebels, in Venezuela a riot broke out, Saudi Arabia’s new oil Minister, and Iran is closer to having to increase production to predicciones level.

These problems impede the ability of oil producers, although a positive effect on the price of oil. But, unfortunately, the chances of their solution are not very many.

In recent times OPEC meeting was held in one scenario: Saudi Arabia and Iran engage in a fierce skirmish, and the rest of the country were simple observers.

The new oil Minister of Saudi Arabia Khalid al-falih, for the first time will be on the OPEC meeting as such, but experts doubt that his words will have the same weight as the former Minister Ali bin Ibrahim al-Naimi.

Oil production outside OPEC fell the most dramatically since 1992, on the background of the bankruptcy of the shale companies in the US. For 11 weeks, the level of production United States fell to lows since September 2014, and on average it is 8.5% lower than in 2015, according to estimates by the energy information Administration.

Acting Minister of oil of Kuwait, ANAS al-Saleh said on 18 may that OPEC’s strategy of “working well”.

At the same time, the head of market research of oil in new York at Societe Generale SA’s Mike Wittner believes that any action which stimulates the growth of prices, oil producers will save US and will jeopardize the market return to equilibrium.

“The Saudis may be concerned that a small price increase can kill in the Bud the rebalancing at a time when it is just beginning. I don’t think they will have enough incentives to do something special,” – said the expert.

While the economy of OPEC countries such as Venezuela and Nigeria, are feeling the pressure, they are probably resigned to the rate established in Riyadh, said the Director of the Center on global energy policy at Columbia University in new York, Jason Bordoff.

“Countries such as Venezuela, during the year spurred OPEC to raise prices. And probably for the first time, they recognize that it’s a completely useless effort. The Saudi strategy of low prices allows you to do the work at competitive cost effective,” said Bordoff

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