Why does oil become cheaper? Forecast of the price of oil

In the fall of 2014, more and more people began to wonder about why oil is cheaper. Starting from September 5, prices for all fuel brands began to fall precipitously. The trend continues today. History shows that during the whole period of existence of the international oil market, there were significant prerequisites for growth and lower prices, including those that were created artificially. The fall of 2014 does not fall under one of the historical phenomena.

What does history tell us about?

The oil price chart from time to time moved swiftly in one direction throughout the history of the market. One of the episodes took place one year before the outbreak of the Persian Gulf War. At that time, the spot value of oil was only $ 18.05. During the war, the prices for Brent crude oil reached $ 29, there were also historical peaks at that time at $ 41.5. An interesting fact is that, like the day before the hostilities began, and the day after their official completion, the cost of fuel was identical - $ 19.93 per barrel. Similar situations took place during the period of the Islamic Revolution in Iran and during the Iran-Iraq war, during the Asian financial crisis and during the second war in Iraq. In September 2014, nothing foreshadowed a colossal fall. As every year, against the background of August, in September the price fell. The fall was not significant, only 4.5%.

Rapid fall

The 4.5% decline continued in October, and the question of why oil is cheaper today, and at the moment remains relevant. When in the middle of autumn the price of oil was at the level of 86.4 dollars per barrel, analysts began to worry. This is due to the fact that the world had no economic prerequisites for this phenomenon was not. The economy of the world's countries, although in decline, but catastrophic or crisis-calling it was very problematic. Such a low and then relatively high price level for the last time was recorded in 2010 after the crisis of 2008 . The world media began actively making statements that the reason for the situation in the market was the manipulation of the United States. What happened in fact, it is impossible to say for sure, but economists singled out several significant factors and phenomena simultaneously.

Shale coup

A fairly large number of world experts say that oil is falling in price because of the carefully hidden real cost of developing shale oil in America. The prime cost of mining a fossil is much lower than the one announced to the public. At the Geneva conference, representatives of major oil companies, such as Morgan Stanley, Eagle Ford and Barclays Plc., Said that the cost of producing shale fuel could range from 30 to 60 dollars per barrel. This indicates that the price of "black gold" in the world market is not critical. Also, forecasts were made that the October drop in prices should soon end. Unfortunately, this forecast for oil prices has not come true.

Manipulations of the OPEC countries

The second factor, which led to concern about the question of why oil is cheaper, is an oversupply in the market. In large quantities, the world market receives "black gold" from Iran. Deliveries from Latin America and Africa have become a significant part of the market. The policy of keeping the cost of oil by reducing its production was categorically rejected by the OPEC countries. A big role in the appearance of a large proposal was played by the sanctions that the EU withdrew from the largest Iranian tanker company NITC. The EU actively supports Tehran, which is also one of the major suppliers. Fuel began to enter the market and from American manufacturers. To say more, recently the USA has invested large sums of money in the extractive industry of such states as South Sudan and Chad, Equatorial Guinea and Mozambique.

Discharge of oil to the market by America

Many experts, wondering why oil is cheaper, mention the global dumping of large amounts of fuel by America into the market. Part of the national reserve was sent for sale because of the low cost of slate mining. Following America to such a sale resorted to Canada, which began to battle for its assets in the Arctic, starting the development of the territories. It is worth mentioning about the preparation of President Obama for the elections of 2017, which determines his policy with respect to the international oil market.

Erroneous forecasts

Today, oil is falling in price and for the reason that even in the middle of autumn of 2014, many brokers were counting on the resumption of the cost of oil after the fall. In their forecasts, world analysts based themselves on the theories of the development of civil conflicts in the Arab countries and lost. False information about the destruction of transport routes and places of fuel production in the Arab countries did not play into the hands of speculators. Instead of the expected growth in the destruction of terminals in Iraq and Libya did not happen. On the contrary, now there are not only one, but two export centers at once. The war goes on in such a way that it does not harm the oil industry.

Actively defends its rights and Kurdistan, whose oil exports are estimated at 4 billion dollars. Restrictions and attempts to cut off Iran's supply channels ended in failure. In the summer of 2013, the sovereignty of the quasi-state Arab Caliphate was declared , through the territory of which the "left" oil was transported to the market. Education of the state only stimulated the transportation to Europe of cheap semi-legal and illegal oil.

Change of routes

The oil price chart continues to move swiftly downward due to a drastic change in the routes of its supply. Attacks by US troops on Syria strengthened the Turkish export direction from Iraq. Covering themselves with the struggle against the Caliphate, about 27 oil refineries and the largest Syrian plant were destroyed. As a result, Syria has left the list of the main fuel suppliers from Iraq. Its place was taken by more productive countries, such as Kurdistan and Turkey. More profitable logistics has stimulated the fall in world prices. The oil reserves of each of Iraq's countries are one and a half times more than the reserves that Russia has. The fall in oil prices will continue because of intense competition between countries. Lowering the price policy, large suppliers, in particular the OPEC countries, intend to drive out all competitors.

The Conflict between America and Russia

Many experts, trying to explain why oil is getting cheaper in Russia, remember the old kind "cold war" between America and Russia. Sanctions imposed because of a military conflict with Ukraine proved to be insufficiently influential, and the Russian economy was practically unaffected. The assumptions speak of attempts to influence the actions of the Russian government by controlling world oil prices. Lowering the cost of fuel leads to a reduction in state revenues in dollar terms. Consequently, the ruble to the dollar is weakening. The economy of the country becomes unable to support the mining industry in the proper amount. The only contradiction in this assumption is that not only Russia itself suffers from falling oil prices, but also the United States, many other states.

Secondary factors of falling oil

The graph of the oil price dynamics shows a downward trend not only as a result of economically insignificant at first glance. The direction is strengthened by numerous secondary phenomena:

• Climate change in the world.
• Simplified navigation access to new Arctic deposits.
• Unjustified Fukushima syndrome in energy. The markets for gas and fuel oil increased significantly in volume.
• Active development of technologies for oil production, search for alternative options for field development.

What will happen next?

The experts' opinion on the question of why oil is cheaper is a bit divergent due to the economic situation in the world and the active division of the world oil market. In this case, most players are focused on the positive outcome of the situation. Many large suppliers of goods expressed their opinion on this issue. With today's fuel price of approximately $ 55, experts announced:

• To the price at the level of $ 60, well-known world analysts, oil and consulting enterprises, experts are inclined.
• US Energy Information Management already in January called the optimal fuel cost per barrel at $ 58.
• The agency "Prime", polling about 150 analysts, gives its forecast for oil prices. They predict a change in the cost of a barrel in the range of $ 50 to 80.
• Analysts of the famous company "Goldman Sachs" stopped at a forecast of $ 50.
• Bank of America Merrill Lynch is betting on the price of $ 40 per barrel.
• The president of the corporation LUKoil is inclined to the cost of oil at $ 60 per barrel.
• Experts Morgan Stanley suggest that in the first - second quarter of 2015 the cost of oil will be kept within $ 57. In this third and fourth quarter of the year, according to company representatives, promises a sharp increase in the cost of oil products to a figure of $ 70.
• Swiss banks are looking at the situation and at all optimistically. They believe in the establishment of prices of oil products at the level of 70 - 85 dollars.

Despite the refusal of many large oil companies of the world from their plans and projects, their expectations remain very optimistic. Despite the tough policies of OPEC, the vast majority of experts are inclined to the fact that soon the situation in the world oil market will equalize, and all losses incurred by both countries and individual companies will be restored. While the trend is falling, and why oil is getting cheaper today, no one will undertake to explain.