Asia today
the oil price has strengthened by almost six per cent in the past day after Opec countries agreed on the draft of the produksjonskutt. But experts believe the agreement is unclear and vague. the Goldman Sachs think oil prices will fall in the fourth quarter.
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Opec surprised by agreeing a deal that will facilitate a produksjonskutt of between 200.000 and 700.000 barrels of oil daily, compared with the average production rate in the month of august.
Negotiation to negotiate
A final agreement will first be released towards the end of the year – after the Opec meeting 30. november.
- This is the negotiations to be able to negotiate, ” says visestyreformann Daniel Yergin at IHS Markit to CNBC.
The annual Opec meeting will take place in two months. First, during this meeting it will be able to come to a formal agreement between Opec countries and other oil-producing countries outside the cartel, including Russia.
I think oil prices will falter, but this gives more support than if they had left the meeting without anything. This will be a process. There was not even an official Opec meeting, but it gives them extra time, ” says Yergin.
There are a few details from the meeting in Algeria, but markedsobservatører think the most important thing is that Saudi Arabia and Iran is willing to negotiate.
“Masallah!”, writes market analyst Angus Nicholson at IG in Melbourne, excited in his morgenoppdatering and uses the Arabic expression of gratitude, praise and joy.
He also calls for details from what the Opec countries have agreed on.
“the Details are currently unclear. Iran says that they don’t have a ceiling on his production. Produksjonskuttet is more modest than some of the ideas that floated around”, he writes.
Saved Opec
According to Reuters will Saudi Arabia be willing to reduce the oil production of 400.000 barrels a day compared with last august. The country has produced around 10.7 million barrels a day in July and august.
- Saudi Arabia does not want to see that oil prices will fall by five dollars. If they had not agreed on anything, it would have been a risk. The market would have swung lower again. This is just as expensive for Saudi Arabia as for any other, ” says Yergin.
This week, the salaries of all public employees in Saudi Arabia cut by 20 per cent.
- It is incredibly important that they have managed so much. Saudi Arabia has really had to give at the table. All credit to the oil minister Khalid al-Falih. He has single-handedly saved the Opecs relevance, ” says the head of råvarestrategi at storbanken RBC, Helima Croft, to CNBC.
Critical to the price of oil
While many oljeanalytikere predicted an oil price of around 60 dollars at the end of the third quarter, the u.s. financial institution Goldman Sachs has long been wary of optimism among some.
the Draft agreement on the produksjonskutt does not change the forecasts.
In a new report maintains Goldman Sachs that the us oljereferanseprisen (wti) will be about 43 dollars a barrel at the end of the year. This is over four dollars lower than what it is on Thursday morning. In 2017 believe Goldman Sachs that the average price will be 53 dollars.
“If the proposed cut is enforced strictly and support around higher oil prices, we expect that this will prove to be self-defeating on mellomland term – with a sharp increase in the borrevirksomheten in the world,” writes Goldman Sachs.
the financial institution writes that the member states of Opec often fail to comply with the signed avtalekvoter – especially when the demand for oil is still high.
If it turns out that Opec manages to control the conduct produksjonskutt between 480.000 and 980.000 barrels a day this will increase oil prices at between seven and 10 dollars, according to Goldman Sachs.
Markets
It is børsoppgang in all of Asia on Thursday morning – led by energy companies.
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