Article-Russia and OPEC are close to concluding a major deal in the oil world


(The author of this article is from the book of articles in Reuters Breaking Views and opinions expressed in this article are his personal views)

Andy Critchlow

London, Feb. 11 (Reuters Breaking Views) - launched the most influential officials in the oil field in Moscow a strong signal that the Kremlin may be serious in the conclusion of a major deal with OPEC.

Igor Sechin, CEO of Rosneft, has pointed out on the tenth of February that simple cuts not exceeding one million barrels per day by the major oil producers will be sufficient to lift oil prices.

For the members of OPEC defaulters such as Venezuela and Nigeria may come an agreement between the major oil powers in the world in the darkest moments.

Brent has fallen about 20 percent this year. He warned Goldman Sachs on 9 February that oil could fall below $ 20 a barrel amid oversupply.

This requires that disqualify the top oil producers in the world political differences in the Middle East aside and agree to limit supplies.

But instead it eased producers of production controls. It arrived in the Russian production this year to a new level did not reach him by since the end of the Soviet era and that Saudi Arabia is pumping oil with satisfaction over ten million barrels a day, its highest level in at least 15 years, according to data from Datastream.

The issuance of such statements for Sechin, a critic of OPEC in the habit may indicate that it is possible to reach a deal. But the most important thing that the policy refers to the need to reach a deal.

If coordination, it is possible to lead a plan between OPEC and Russia to cut the equivalent of only 2.3 percent of the co-production with higher prices but without a significant change in the share of each product from the market if everyone participated in the cuts. Sechin did not give an undertaking critical but put up a record easily accessible so that it can begin its talks.

And possibly Saudi Arabia prefer to wait until the market forces take its normal course and stopped the work of producers who produce at a higher cost. But this is not happening at a fast pace.

The latest monthly report, OPEC reduced output expected from outside the organization by 700 thousand barrels per day this year.

On the other hand, lower prices led to the approach of Venezuela, 99 percent of the inability to meet its obligations, based on the price of swaps to secure defaults for ten years while the price of swaps insurance defaults to Nigeria indicates that the chance failure to repayment of 56 percent.

If it extended an olive branch the hands of both parties to a strong reason to call for the Tlagafh.