Tamar Essner, NASDAQ energy analyst, publicly announced that the oil market (HUC.TO) could remain turbulent this year, whilst crude oil prices could finish the year equal or higher than $5.
Monday, oil prices have increased with 2% to 48.71 dollars per barrel, after a series of explosions at oil installations in Nigeria and the arson from Canada have sharply reduced global production, so demand is now higher than production, Reuters says.
United States crude oil prices have increased from $26.05 per barrel in January to higher than 80% percent now, but the NASDAQ analyst added that it is not lasting being just temporary.
Even though there was arson in oil sands of Canada that provoked some interruptions and an employee’s revolt in Kuwait recently, the oil market never have stopped working.
Even so, due to military revolts against the oil infrastructure in Nigeria, country output has collapsed.
While this is happening, due to a brutal money deficit Venezuelan production is falling.
According to a report by Goldman Sachs (GS), production problems have decreased the extraction with 3.75 million barrels a day, and demand is healthy, so that the bank notes end of the oil crisis. This is a position 180 degree different from previous reports of Goldman Sachs when the bank noted that prices could fall even at 20 dollars per barrel.
On the other hand, Organization of Petroleum Exporting Countries (OPEC) increased production, members within it were engaged in a ruthless race for market share.OPEC pumped 32.44 million barrels in April, with 188,000 more than in March, the highest level since 2008.
Tamar Essner told that Saudi Arabia couldn’t change its tactics of keeping big output to push producers to stop the balance oversupply and protect its market distribution.
According to the information collected, the Arab country currently produces over 10.1 million barrels of oil a day, representing 1/3 of the Organization of the Petroleum Exporting Countries production.
Explaining its monopoly is easy, as Saudis did developed a low cost production way and do possess (for their world’s largest oil reserves) world’s largest oil reserves. Using those ways, they seem to diversify their economy, the analyst added.
These strategies drive to the extortion of United States shale producers and maintain Saudi Arabia conflict with his regional rival, Iran, former Persia.Diplomatic tensions between Saudi Arabia and Iran began after the execution of a Shiite cleric in the Saudi kingdom followed by attacks on the Saudi embassy in Tehran.In this conflict, Saudi Arabia is supported by Bahrain, Sudan, United Arab Emirates, Kuwait and Jordan. On the other hand, Iran is supported by Lebanese movement Hezbollah,
Syrian President Bashar al Assad and Iraq Shiite government in Baghdad.The mediator of this conflict is the Sultanate of Oman which has long historical links with Iran and Oman and was the place for secret talks between Iranian officials and the US officials, prior agreement between Iran and world powers on Iran’s disputed nuclear program.