American robbery: can the United States cash in on the OPEC + deal

Alexey Belogoryev, Deputy Principal Director on Energy Studies commented to News.ru on the current tasks and prospects of maintaining the OPEC + agreement.

The US Department of Energy often underestimates its evaluation, - Alexei Belogoryev, Deputy Principal Director on Energy Studies at the Institute for Energy and Finance said. In his opinion, production in the United States will grow by more than 100 thousand barrels per day. However, this is not so important for OPEC + now.

Until March of this year, OPEC + tried to fight against shale production in the United States - this was the main enemy. It was namely the source, which created a surplus in the oil market. For example, in 2014, the OPEC Cartel decided not to reduce production and to give everything to the market, trying to squeeze out shale production. Now the situation has changed, because the main problem has become a decrease in demand for crude oil.

Production in other countries needs to be monitored, but OPEC + will not make decisions on a deal based on this factor, the economist believes.

The current level of commodity prices allows many countries to increase production, notes Aleksey Belogoryev. But even the key player - the United States - will have a tough time next year, he warns.

There are many companies in the United States that need to close the problem of large debts and increase the profitability of production, which is what investors and lenders demand from them. This is more important now than increasing production. In the next 1.5-2 years, they will be aimed primarily at solving debt problems and reducing costs. $ 50 per barrel is a good price, but not enough for the explosive growth of production in the United States in the next one or two years, the economist said.

Prices are responsive to future events. In addition, the general mood of the market plays an important role, Aleksey Belogoryev notes.

Almost a catastrophe was expected in the spring, but now the mood is much more optimistic - the situation is more predictable compared to spring, everyone is inspired by new vaccines and the fact that lockdowns are not ubiquitous and many countries do not institute its. There is a tendency towards greater optimism regarding commodities, and this is reflected in prices, the expert explained.