OPEC + countries will most likely extend the agreement to reduce oil production until the end of 2019, albeit with changed parameters, Fitch analysts write in their updated forecast for oil and gas prices, Trend reports with reference to TASS.
“We believe that OPEC + will be extended at least until the end of this year, although its parameters may change. As a result, we expect the market to remain generally balanced and average annual oil prices will remain in line with our existing basic assumptions”, – analysts say.
According to Fitch's forecast, the cost of oil in 2019 will be $ 65 per barrel.
For many OPEC members in the Middle East, such as the United Arab Emirates and Kuwait, this price is quite comfortable, analysts say. The exception is Saudi Arabia, for which a deficit-free budget starts at $ 80 per barrel.
However, in the long term, if OPEC + policy becomes less effective, the average annual oil price may drop to $ 57.5 per barrel, experts say. However, even at such a price, the business of shale companies from the United States remains profitable, they point out.
OPEC + countries since April, discuss the policy on production in the second half of the year. But due to uncertainties and geopolitical factors, agreement on production levels has not yet been reached. The deal to reduce production by 1.2 million barrels per day, of which Russia accounts for 228 thousand barrels per day, was concluded in December 2018 and ends on June 30.