Expert: Oil market expects doomsday scenario next week

The situation in the world with oil, associated with uncertainty about the status of Russian raw materials, is on the verge of disaster. The situation forces French President Emmanuel Macron to publicly run after the head of the White House, Joe Biden, and beg him to "influence the situation." This blatant humiliation testifies not so much to the crisis as to the critical state of the world oil market. However, the real doomsday scenario for the world oil market may come as early as this week. Dr. writes about it economics Cyril Widdershoven in an article for OilPrice.

As the expert notes, alternative supplies can give a temporary respite, but it is impossible to find them: all producers are at the peak of production. Russian oil is banned, although there is a lot of it, it is cheap and of high quality. Therefore, all market participants froze in anticipation of an event that will determine life and death in the industry in the coming months: OPEC will meet for a regular meeting, develop an export strategy, and, most importantly, reveal the true volumes of raw material reserves, as well as the amount of free capacity from cartel members.

The conflict in Ukraine caused the world market to lose up to 4,5 million barrels of exports from the Russian Federation daily in oil and products from it. At the same time, it is assumed that Saudi Arabia and the United Arab Emirates together have the potential to increase production by 3-4 million barrels per day maximum. This creates a dangerous tension in expectations and unnecessary excitement.

Until that time, experts assumed that large OPEC members have reserves to increase production, it is enough just to “open the taps”. However, the words of the embarrassed and puzzled Macron shattered all these certainties and assumptions. Therefore, the scenario of the end of the world, the doomsday of the world market is not so unrealizable. The denouement will come in the very near future, writes Widdershoven.

The expert warns that no more OPEC statements in the next two days will be able to dispel fears in the market. The future of OPEC depends entirely on its actual ability to stabilize the markets. At present, the cartel seems to have no options - the members of the alliance cannot even ensure that the required quotas are met.

All the markets are based on is optimism and the preserved belief in a miracle. What is not a solid basis for confidence, much less stability

- summed up the expert.
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  1. Pivander Offline Pivander
    Pivander (Alex) 29 June 2022 09: 24
    Nice of course. We have a diesel engine in Riga 2.15 euros a liter, 95/98 - 2.12 liters. And this is just the beginning .. Thanks to the truckers that they bring diesel fuel from the Russian Federation at 1.40 at the moment. Although not many save normal people. Well, the farmers pour diesel fuel from tractors into their carts of the last century - subsidized at the expense of taxpayers.
  2. Bakht Offline Bakht
    Bakht (Bakhtiyar) 29 June 2022 09: 26
    OPEC will meet for the next meeting, determine the export strategy, and, most importantly, it will reveal the true volumes of raw material reserves, as well as the amount of free capacity from members of the cartel.

    Will never open up. And if they do, no one will believe it. The Saudis are at their limit. The situation can be saved by Venezuela, Iran and Libya. And then not immediately. Maybe in six months. The problem is that all three countries, by the efforts of the West, are excluded from world oil production.
    1. Bulanov Offline Bulanov
      Bulanov (Vladimir) 29 June 2022 09: 54
      One feels the hand of a master in a long-term project. First they turned off Iran, then Iraq, then Libya, Venezuela, now they are trying to turn off Russia. Perhaps the Creator had something in mind. Or maybe his antagonist, and the Creator is watching and does not intervene yet?
      1. Alexey Davydov Offline Alexey Davydov
        Alexey Davydov (Alexey) 29 June 2022 15: 28
        Not surprising. No wonder they say that greed destroys.
        The law of the world, given by the Creator, is manifested. Be adequate. When you take care of the future of those around you, you also take care of your own.
      2. instrument Offline instrument
        instrument (xxx) 30 June 2022 09: 29
        when the creator wants to punish a person, he deprives him of his mind: first, the rainbow Europeans launched an uncountable number of migrants, then they destroyed sp-2 in every possible way, then, indirectly, they got into a war with us (the supply of weapons is an expensive pleasure, and its replacement with a new - even more so), now they will cut themselves off from cheaper (our) oil. well, welcome to hell!
    2. Sarmat Sanych Offline Sarmat Sanych
      Sarmat Sanych (Sarmat Sanych) 6 July 2022 10: 16
      Bakht, in Venezuela, a significant increase in production requires billions of investments and at least two to two and a half years. You can not even mention Libya, where a new round of the Civil War started the other day, last weekend they stopped production to zero. And sanctions will not be lifted from Iran, this is already clear now, and the Persians do not need it (high prices please all oil producers on the planet, you sell less - you get more), plus they will never give up the nuclear program, the West cannot be trusted.
      1. Bakht Offline Bakht
        Bakht (Bakhtiyar) 6 July 2022 21: 47
        The West cannot be trusted - this is already clear to everyone. About Venezuela and Iran, we can add that they have a small condition. Quite small. Unblock frozen accounts. Not much compared to Russia. I think the total is no more than $100 billion.
        But have you ever heard of a thief returning what was stolen?
  3. Sergey Pavlenko Offline Sergey Pavlenko
    Sergey Pavlenko (Sergey Pavlenko) 29 June 2022 09: 42
    Well, let Macron transfer all his vehicles to donkey urine .... maybe then he will agree with the Saudis, there are a lot of donkeys there ...
    1. k7k8 Offline k7k8
      k7k8 (vic) 29 June 2022 10: 20
      Quote: Sergey Pavlenko
      Well let Macron convert all his vehicles to donkey piss

      Macaron and company do not care how much a liter of fuel costs. As, however, to legal entities (the share of transportation costs in the final price of products is not so large). But the conditional John / Hans / Jean has to scratch his turnips hard at the gas station, when you have to pay a hundred Jewish rubles for refueling the conditional Golf.
      1. Bobik012 Offline Bobik012
        Bobik012 (Vladimir) 29 June 2022 13: 48
        the share of transportation costs in the final price of products is not so large

        Who revealed such an economic secret to you? You will be quite surprised, but in agriculture the cost of fuel is more than 50% of the cost of production. About energy in industry, I think no one has any misconceptions? Or maybe someone believes that with the growth of oil, other energy carriers will not rise?
        1. k7k8 Offline k7k8
          k7k8 (vic) 29 June 2022 22: 45
          Do we only read diagonally? You yourself took a quote with the main word "ultimate". Grain in the field is not the final product (like iron ore concentrate in the mining industry), but a loaf of bread on the counter in the supermarket (or a hammer in the construction market) is the final product. And the share of the same fuel in their prices for the end user is not so great. Otherwise, for every 100% increase in the price of oil, the market would respond with at least a 50% increase in the price for the end consumer.
          1. Sarmat Sanych Offline Sarmat Sanych
            Sarmat Sanych (Sarmat Sanych) 6 July 2022 10: 33
            k7k8 (vic), don't write such nonsense anymore and march for economic pricing textbooks. There you will read how industrial inflation differs from consumer inflation, after how many months the first turns into the second, how compensatory lags smooth out, as a result of which situations like

            Quote: k7k8
            for every 100% increase in the price of oil, the market would respond with at least a 50% increase in the price for the end consumer.

            And yes, not only the cost of oil is important, but also the cost of all energy carriers, because the rise or fall of some is accompanied by the same for others, for example, the average sale price of 1000 cubic meters by Gazprom in the EU in the 1st half of 2022 was a little over $1000 (3 times more than in 2021), for example, a ton of coal in the port of Rotterdam is now $420 per ton (5 times more expensive than in 2021), uranium has skyrocketed in price, and so on.
            But the cost of energy in a broad sense (nitrogen fertilizers from natural gas, electricity for the production of the product, fuel and lubricants at all stages of production, etc.) - in a food product for the end consumer, is on average 40-60%.
  4. Jarilo Offline Jarilo
    Jarilo (Sergei) 29 June 2022 11: 11
    Let Macron ask Biden why they are not leaving Rusal. Let him return everything to Deripaska.
  5. Understanding Offline Understanding
    Understanding (Alexander) 29 June 2022 14: 57
    Quote: Bulanov
    One feels the hand of the master

    Undoubtedly. Even without any mysticism, in what is happening now, a clear plan is clearly visible. Enough popcorn.)
  6. amon Offline amon
    amon (Amon Amon) 30 June 2022 17: 03
    Welcome to Hell Europe! I wouldn't want to go there!