OPEC turned to other large producers with an earnest request to reduce production and help balance the market cartel.
The unusual request was published last Thursday in the quarterly report of the cartel, which showed that there is still a problem of oversupply in the global markets.
The report said that balance the market "requires the collective efforts of all oil producers," and it should be done "not only for individual countries, but also for the common prosperity of the world economy."
OPEC said that, in particular, is guilty of a glut of origin: United States, where shale oil producers continue to increase production volumes, despite lower oil prices.
Production growth in the US has undermined OPEC efforts to maintain prices at levels from $ 50 to $ 60 per barrel.
OPEC and other producers agreed to cut production in November, which was a step on the way to get rid of global markets by oversupply. For a while, the strategy worked, and the price at the beginning of this year has exceeded $ 54 dollars.
Now, it seems the situation has changed.
Cartel responded to the sharp decline in prices, assuming that the agreement may be extended in the second half of the year. But it will not help solve the American problem of OPEC. The United States did not join the cartel agreement, and the number of drilling rigs has doubled over the last year.
See also: Lack of oil in the world markets will grow, if the transaction OPEC will be extended: the IEA
«I think OPEC is now fully aware that they do not have such an impact, as they had 10 years ago, and that the producers of shale oil is now in the lead on the market ", - he said last week, Tom Pugh, economist commodities Capital Economics.
Cartel in the past fiercely fought for market share. Since 2014, its production has increased at the fastest pace to get ahead of American manufacturers.
The strategy has pushed prices well below $ 30 per barrel and forced many US manufacturers cut production in 2015 and 2016. The strategy had disastrous consequences for government budgets of OPEC member countries, forcing them to apply austerity measures.
It also made US manufacturers to improve efficiency, and now they can withstand much lower prices than a few years ago. Analysts at UBS believe that the US is now manufacturers can make money as long as prices remain above $ 40 a barrel, compared with a profit only at the price of $ 65 in early 2014.
Based on materials WELTRADE
