In the world, oil production has been a record decline: what happens to prices and what to expect in the future

OPEC countries are rapidly reducing the supply of black gold

In January, the OPEC countries reduced oil production by 890 thousand barrels. per day — a record value since January 2016. Thus, in December 2018, oil supplies from OPEC countries decreased by 751 thousand barrels per day — to 31.6 million barrels. According to Reuters, Saudi Arabia reduced supplies most of all — by 468 thousand barrels per day, Reports Fox News Live Stream Free.

In January, the decline continued. In the first month of the year, OPEC members collectively pumped about 30.98 million barrels of oil per day, which is 890 thousand barrels per day lower than the figures of December.

Again, the largest reduction in supply occurred in Saudi Arabia. The country produced 350 thousand barrels per day less than in December. In addition, Saudi Arabian Energy Minister Khalid Al-Falih promised to cut oil production “significantly more” in February. The country’s goal is to produce about 10.3 million barrels per day.

“The second and third largest fall occurred in Kuwait and the UAE, which, as in the case of Saudi Arabia, suffered more damage than was required under the deal”, Reuters reports.

Against the background of a decrease in the supply of black gold due to US sanctions against Iran and Venezuela, experts assume that oil may soon exceed the psychological threshold of $ 70 per barrel. However, for the time being, the price of black gold of the reference brand Brent falls back after active growth and barely exceeds $ 62 per barrel.

According to experts, several factors have recently influenced the rise in oil prices. So, investors are optimistic about the positive news around the US-China trade negotiations. Pushed up the prices and clarifications of the US Treasury Department on sanctions against Venezuelan state oil company PDVSA, which significantly limits the oil trade between Venezuela and other countries. At the same time, exports of black gold from the country only in 2018 dropped to their lows in 28 years. Venezuela exported only 1.245 million barrels. oil per day. Oil production in Venezuela, according to OPEC, over the past five years has fallen more than twice, to 1.346 million barrels. per day.

Experts point out that the latest Baker Hughes data also affects trading. According to the company’s report, in the week ending February 2, the number of oil rigs in the USA decreased by 15 units to 847 units. This eased concerns about a rise in US raw material production.

According to some analysts, oil prices in the coming months will be in the range of 55-70 dollars per barrel of Brent and the positive momentum may well remain in effect until May or even until July. Possible targets for growth in this case are levels near $ 71–73 per barrel of Brent and 63–65 for the American WT.

Recall that at the end of 2018, OPEC countries and other oil exporters agreed to reduce oil production by 1.2 million barrels per day from January 2019 over a half year.

Author: Flyn Braun
Graduated from Cambridge University. Previously, he worked in various diferent news media. Currently, it is a columnist of the us news section in the Free News editors.
Function: Editor