What does 2017 bring for oil market?


2017 was hard, but productive year for the world oil market, energy experts said in an interview with Vestnik Kavkaza, summing up the oil results of this year.

The executive vice-president of NewTech Services, professor of the Gubkin Russian State University of Oil and Gas, Valery Bessel, said that "it's very good that the oil has been growing for the entire year, since it was positively affected by the growing oil consumption. The price of oil that we have now was somewhat higher than I expected, and by the end of the year we will reach $60 per barrel, which is very comfortable for oil and gas industry, since it covers almost all costs," he said.

As for Russian oil industry, this year was also successful. "The results of this year's oil production have not been published yet, but overall, we have steadily maintained our positions both in production, refining and, most importantly, in oil markets. Right now countries fight for oil markets, nobody wants to lose them, since other players will take them. The OPEC + agreement played its role to some extent, but I'm not sure whether it was that significant, since there were other factors, including economic growth in the US, China, the EU, and ours too. When there's economic growth energy consumption also begins to increase," Valery Bessel noted.

"In the end I think this year was pretty greate. Russia's oil and gas industries worked actively and created new platforms for the development of fields in the East and the Far East. And now our development will be even more powerful," he stressed.

A leading analyst of the National Energy Security Fund, a lecturer at the Financial University under the Government of the Russian Federation, Igor Yushkov, said that current oil prices are the main result of this year. "And this is a positive trend of the last two years: on December 31 oil costs more compared to December 31 of previous year. We met previous New Year with the price of $55 per barrel, and 2018 will kick off with $66 per barrel, and this is the main result that largely determines other aspects of the oil market's life."

The biggest factor that helped to achieve this rebalancing was the OPEC+ deal. "One of the biggest results of 2017 was that this OPEC+ deal to limit oil production actually worked. Not everyone believed that it would work, that all the parties would fulfill their obligations, but they all showed discipline and the production was indeed limited," he noted.