Oil price continues fluctuating in the world market. The drop in oil price in the beginning of January is regarded with increasing of doubts due to implementation of OPEC decision on cutting oil output by the OPEC countries. Whereas starting from the end of last week oil price rose again.
How far do the OPEC countries follow the agreement reached in the Congress of Vienna? Is oil price drop possible? What should do the sides to keep the agreement in force?
Economists have shared their views on this issue.
Economist Perviz Heydarov told in his statement to our newspaper that countries are interested in stabilization of the prices: " The year has just started. From the Since the first of January the countries have joined process of implementation of the agreement. Almost all oil producing countries maintain stabilization of the prices. That is why, any problem is not supposed to be in realization of the decision. Touching upon oil price increase P.Heydarov added that an offer is more expanded in the market than demand. However, elimination of the tendency is not real nowadays. On the other hand, the US dollar continues to strengthen. If dollar had not been strong the OPEC could not have made this decision and as a consequence of this oil price would rise up 60$. The US is expected to produce oil in the short term. It will broad the offer. So to expect rapid price rise is not real.
Head of Oil Research Center Ilham Shaban said that the sides have been following the terms of agreement: " Kuwait, Saudi Arabia and Irag have officially announced the start of realization of the decisions made in Vienna Congress.
The Wall Street Journal reported citing the resources in Saudi Arabia that the country had already started reducing oil output since December and will have reduced output 450 thousand barrels by fourth of January. This, in fact, shows Saudi Arabia follows the agreement. Moreover, Kuwait stated about reduction of oil output by 131 thousand barrels within the first quarter. As well as, Irag announced reduction of oil output from the 1st of January.
Expert deems the process will be realized gradually: " On the other hand, Kazakhistan officially announced reduction of oil output buy 20 thousand barrel.
Although news on reduction of the output by Russia’s State Oil Company Rosneft in this month was revealed but it has not fulfilled yet. The main issue will be regarding with the OPEC's report to be released within Feb 10-11. The report is expected to show the state in January and condition of oil output of OPEC countries.
I.Shaban also noted that Vienna agreement might be terminated by the countries: "At last week oil price rise up $58 and then plunged. Note that head of Kuwait Oil Company stated that reduction of oil production has been started. In fact, such news has positive impact on the market. However, the market prices can not remain stable for a long time. As oil price may fluctuate any time. Touching on lokelihood of termination of the agreement reached in Vienna congress I.Shaban said that it is possible. But theOPEC report to be released in February is very significant. The report will show how far the countries follow the Vienna agreement." added I.Shaban.