Bloomberg, assessing the situation on the market, compiled a list of the five main factors that can affect the price of oil next year, reports Thursday by RBC.
First, the Agency expects growth in supply of shale oil from the United States. Bloomberg drew attention to the fact that the price of oil North sea Brent crude has exceeded $ 66 on the background of the explosion on the pipeline in Libya, the Texas oil WTI is kept at below 60 dollars. The Agency calls the difference between the value of the two brands most in more than two years. This situation stems from the fact that the hurricane "Harvey," has restricted access to reserves in the United States, so in the new year we can expect the expansion of U.S. exports. With the growth of shale mining are expected record supply of oil from the U.S. in 2018. "If there is increase of oil shale extraction and canadian oil in the first half [of the year], and OPEC will continue to cut production, then the difference should be increased", — said the Agency the founder of the London hedge Fund Capital Matilda Richard Fullerton.
The influence of OPEC
Due to the fact that OPEC holds oil production, a play on the increase in Brent. Premium futures with delivery in December 2018 has risen to its highest level against the awards of the South in December 2019, and the gap may increase further. OPEC leads the market in a state of balance, according to Bloomberg.
In connection with geopolitical risks that may face the big players in the market, funds were busy buying options in the hope to benefit from the sharp rise in oil prices. Options December 2018 at $ 100 per barrel remain the most popular contracts for Brent. Venezuela, Iran and Saudi Arabia are considered to be countries, which could affect the price of oil, Bloomberg reported.
Despite the risks, volatility of oil fell to the lowest level in three years against the background of stable price growth. OPEC clearly outlined their plans for 2018, which banks, including Societe Generale SA, waiting for the continuation of reduced volatility in the coming year. "OPEC's decision to proactively manage the market will keep volatility flat as a pancake" — said the chief oil market analyst at Energy Aspects Amrita sen Ltd.
The market welcomed the new year with a record number of bets on the increase in Brent and WTI (over 0.9 million). Such contracts are much more than contracts implying the reduction, which allows to assume that in 2018 it may cause a collapse caused by the actions of speculators, warns Bloomberg. According to the chief analyst at DNB Bank ASA Torbjørn Kjus, the difficulty is that "we don't know what kind of players". "If they want to keep most of its assets in the commodities market in the next two years, then they will not sell those positions," said Kjus.