Passions, heated up to the limit in spring, around world prices for “black gold” have recently somewhat diminished. Quotes per barrel are kept at an average level 40 more than dollars and in most countries, whose economy is more or less rigidly “tied” to energy exports, humbly pray, to not get worse. Wherein, of course, secretly dreaming of a new price increase.
However, there is reason to believe, that the current lull will soon end and the “great redistribution” will continue with renewed vigor. To whom and what are the impending changes? try to understand.
USA: the patient is rather dead, what is alive ...
More recently, among the American "shale" there was a sharp recovery, almost reaching hype. Amid local economic analysts, a heated discussion has begun about rumors, that the oil industry of the United States that collapsed below all conceivable and unimaginable limits is not just about to revive, like a phoenix from the ashes, but also “will begin a new expansion into world energy markets”. The same Primary Vision predicted, that by the end of June, the level of production may increase by half a million barrels per day. Norwegian Rystad Energy, showing Nordic restraint, talked about the daily “plus” in 400 thousand barrels. Such enchanting forecasts looked somewhat ridiculous against the background of more than sad realities - according to estimates of the US Department of Energy not prone to excessive optimism, in mid-July, black gold production in the country set another anti-record, collapsing to 10.5 million barrels per day, which is the lowest since spring 2018 of the year. In total, since the beginning of 2020, the level of oil production decreased by 2.5 million barrels per day, of which one and a half million are just on the “slate”, in early June, with difficulty gave about 7.7 million barrels per day., which came precisely in this segment of the industry can be considered the most devastating. Of 700 fracking drilling rigs to the present moment "alive" not even two hundred, that is, less than a third of them work. Nevertheless, it was worth the price of an oil barrel to approach 40 dollars, and some of the "shale" immediately combed their hands. The same CEO of one of the industry’s most significant companies, Devon Energy Corp David Hager not just said, that if, if quotes do not fall below 30 dollars, “There will be no new reductions”. He proclaimed, that the American "slate" is determined to "regain everything" and again enter the world markets, "Filling them with oil flows from the USA". One must be a very alternative gifted person, not to understand, what result can this expansion bring in the current, barely relatively stabilized situation. However, panic about this, perhaps, not worth it. Unhealthy ambition – this one, and life is completely different. In reality, Chesapeake Energy, one of the “pioneers” in the production of shale oil, became aware of bankruptcy the day before.. Its shares on the New York Stock Exchange for a half year collapsed with 180 more than dollars to 12. Debt accumulated on 7 billions of dollars. And the creditors agreed to invest no more in new business 925 million ... most likely, the same situation expects the entire "shale" industry, completely unable to exist without constant financial infusions from outside.
Saudi Arabia: moderation, saving and no expansion!
Acting as the main opponent of Russia during the “oil war” that broke out this year, Saudi Arabia, as it appears, made very solid conclusions from everything, what followed her rash actions during this battle. There will be no more “attraction of unprecedented generosity” from the sheikhs. Quite the contrary - Riyadh has already announced an increase in export prices for “black gold” in July by an average of 6-7 dollars per barrel. This far exceeds expert expectations., according to which saudi oil should have risen in price by a maximum of 4 dollar. At the same time the kingdom on 10-40% supply will be reduced, first of all, to Asian markets, to South Korea and Japan. And this despite the fact, what, according to the data, provided by the Kingdom's Statistical Office, in the first quarter of this year alone, oil exports from the country in monetary terms have already fallen by almost a quarter. And the point is not only in its "depreciation", as well as in reducing the physical quantity of “black gold” exported from the country. "Step on the same rake", that they aren’t clearly going to gather there in spring - even today, traditionally Saudi-backed neighbors consider them to be the culprits of that price collapse, the consequences of which the whole Middle East and not only it still perceives. In particular, About, that an attempt to redistribute the energy market in its favor with dumping was a “big mistake” in Riyadh, not so long ago, the Minister of Energy of Qatar openly declared. However, in the kingdom and without observers from the side they see perfectly, what the risky escapades cost - the expected annual decline in GDP is estimated at 3.5%, and the sharply “thinning” state budget, which is not used to denying anything to itself, has to mercilessly “slaughter it alive”. Value added tax almost tripled, social benefits significantly reduced, the total sequestration of budget revenues amounted to almost 27 billions of dollars. It got to the, even defense programs are at stake now, in which Riyadh has not been stingy in recent years - arms purchases in the United States alone in the period from 2017 by 2027 year should have been carried out for astronomical amounts of hundreds of billions of dollars. The implementation of the ambitious Vision program was also called into question. 2030, whose main goal is to get out of the situation, when the state’s economy is almost completely dependent on oil exports. No "sudden movements", able to swing again, or even send the "boat" to the bottom barely afloat, where all states are now, for which the price of a barrel is the basis of stability and wealth, Saudi Arabia will not definitely do.
Russia: difficult times and new hopes
As for our country, then the fall in the price of "black gold" by 45% since the beginning of this year, certainly, could not but affect her budget. He has already suffered damage of hundreds of billions of rubles, and this, perhaps, not the end of trouble. Nevertheless, the most pessimistic forecasts like “economic collapse”, “A hundred dollars” and the like, Fortunately, did not come true. Anyway, till. Furthermore, some people in the country already speak about fairly good prospects for the future. So, German Gref, head of Sberbank of Russia, announced on the eve, that instead of the initially expected fall in GDP by 6, and even that’s it 9%, today we can talk about, that this unpleasant figure will be half as much - 4.5% maximum. Furthermore, banker sure, that our national currency will strengthen by the end of the year by 10% and the value of the dollar will be no more 60 rubles. All this will be possible with the increase in the price of Brent to 60 dollars, what Gref expects, leaning, According to him, on forecasts of “serious and experienced analysts”. All this, of course, could be attributed to the inherent desire of some of our compatriots to present the situation in a better light, what is really, and penchant for a certain “hatred” (which, however, Mr. Gref is not suffering), if not for another piece of news. Almost simultaneously with optimistic statements by the head of Sberbank, news was heard that, that in the very near future a new serious “player” will appear on the world energy market, capable of more than significantly affecting the situation on a global scale. We are talking about the creation of such leading Chinese importing companies of "black gold", like china petroleum & Chemical Corp. (Sinopec), Sinochem, PetroChina и China National Offshore Oil Corporation (CNOOC) joint energy procurement industry group. Considering, that the total volume of oil imported into the Celestial Empire by potential participants in this conglomerate of oil today is estimated at 5 million barrels daily, we can safely talk about the appearance of the world's largest buyer of this raw material, quite capable of playing a decisive role in the industry market. Wherein, According to available data, first deal, which is planned by the new association, there will be a purchase of Russian oil, mined in Siberia. Application for its delivery through the East Siberia - Pacific Ocean pipeline (ESPO) members of the group, as far as, having passed all the necessary regulatory procedures and received the approval and support of Beijing, They intend to file literally next month. It is because of this that the data on that, that in the last month or two Russia has sold a record small amount of oil on the European market, beginning with 2003 of the year. It is unpleasant, of course, however quite predictably. According to estimates of the head of the European Central Bank Christina Lagarde, Eurozone economic decline could reach 15%. What purchases are there? If our "black gold" right now succeeds in realizing its chance and firmly gain a foothold in the markets of Asia, it will be much more profitable and promising as in the short, and in the long term. According to analysts at JP Morgan, "Sifted" on 9 million barrels per day world oil consumption by fall 2021 years should return to the pre-crisis level in 100 million barrels daily. The question is:, which of the exporters will come to this moment with the least losses and will be ready to occupy the “space” freed up in the markets. It is unlikely that they will be Americans - the local wise men from Goldman Sachs, for example, consider, that the "shale" can no longer recover from the damage. And analysts of the American law firm Haynes & Boone sure, that even the price is higher 30 dollars a barrel will not save the case, and the number of bankrupt companies in this industry to 2021 year will pass 170. Representatives of JP Morgan "bet" on Saudi Arabia because of, what they consider her a country “with the lowest cost of production and the best reserves”, and predicted Riyadh share in 15% in the global market to 2025 year. maybe, so it will be, perhaps, no. However anyway, Russia's chances in this situation also look far from the worst.
Author: Alexander Neukropny
