Oil price fall was the biggest shock that hit the world economy in 2014, according to the British business newspaper Financial Times.
Since June, oil prices fell 40 percent to around $ 60 a barrel just before Christmas.
Organization of Petroleum Exporting Countries (OPEC), which hardly any longer cared about, suddenly stood in the center of world attention.
– As cartel OPEC is dead. The gang can no longer negotiate a particular oil prices, says chief economist Jan Andreassen savings bank alliance oak, Aftenposten.
Oil shock
26. November the oil ministers from the 12 OPEC in Vienna. “Everyone” expected that OPEC ministers came to cut oil production to stop the fall in oil prices which had taken place after the summer.
To everyone’s surprise came no decision on production cuts.
Oil prices plunged and exchanges fell. So did the value of oil currencies Norwegian krone and the Russian ruble.
Saudi Arabia determines
Why was there no oil analysts or other observers who foresaw drop in oil prices and OPEC’s new influence?
– We thought that they would make a symbolic cuts to keep OPEC total. That Saudi Arabia would throw out a meat bone to the other member states. But it was worse than that, said oil analyst Torbjorn Kjus DNB Markets.
After his reviews are the Saudi Arabia, UAE and Kuwait in power and decide in OPEC.
Others were not heard
– Over Production was so great that they saw no purpose with the others. They had tried to negotiate with Russia and Mexico, but without result, said Kjus.
The big oil production in Russia and shale oil and -gassproduksjonen in the United States have in recent years turned upside down on the global oil market.
OPEC gradually becomes less
OPEC’s market share is gradually reduced and currently represents around 30 percent. The International Energy Agency (IEA) believes the decline will continue next year.
Kjus not share the assessment that OPEC has been irrelevant.
– OPEC has lost some of its power . But Saudi Arabia has with his conscious behavior shown that they obviously have a power over the market. The fact that they did not cut production is also a demonstration of power, he said.
“Have no longer power”
The assessment does not share chief economist Andreassen Eika alliance.
– OPEC has no longer the power to control the price of oil. For the production of shale oil and dioxide become too big. If there is to regain some of the power must OPEC expanded and gain with major oil producers like Russia, Norway and Mexico, Andreassen says.
From cartel to market
Thina M. Saltvedt, chief of oil analysis at Nordea Markets notes that OPEC has had a clear strategy to support an unofficial target price of 100 dollars a barrel.
In November waived the this strategy.
– OPEC has lost part of control to other major competitors in the world market: Russia and the USA. It rests a huge uncertainty about what is going to happen in Russia. The US has shale revolution gained a completely different position in the market. OPEC has gone from being a cartel to a more market-driven because of the great competition with major oil producers such as Russia and the United States standing outside the cartel, she said.
What is the average oil price next year?
Torbjorn Kjos, oil analyst DNB Markets
– Our estimate is $ 70 a barrel. We think that the price will be weak in the first half, but going to rise into the second half. Oil price fall could lead to a cut in global oil investment of almost 30 percent from 2014 to 2016. It can be followed by a new period of overinvestment after the price reacts after 2020.
Thina M. Saltvedt, oil analyst Nordea Markets
– We have turned down price estimate to $ 62 throughout the year. At the end of last year was our estimate of $ 107 on average in 2014. When we have revised due to the lower demand. We see that it becomes weaker in Japan, China and Europe. Meanwhile there has been more oil in the market. Libya, which participates in OPEC, has come back with large volumes.
Jan Andreassen, chief economics in oak Alliance
– $ 70 a barrel. Price will gradually increase around $ 80 in 2020. At the beginning of the year estimated the International Energy Agency (IEA) that global oil production came to increase by 1.5 million barrels. day of the year. This is halved to 700,000 barrels. Next year, the IEA estimates that the daily oil production will increase to 500,000 barrels.
Elisabeth Holvik, chief economist at Sparebank 1 Group
– We have not made such estimates. With a stronger dollar and that it takes time to shut down oil fields quickly to reduce production to lower demand, I think oil prices are going to be around $ 60 a good time, but with the danger of tilting down toward $ 50 a barrel.
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