At the commodities markets, the end of the year turns to be optimistic. Oil prices show a nice trend, they are climbing up and will continue hiking in the very last days of 2016. Analytics declared optimistic forecasts for the oil.

The oil producers keep moving and smiling.

Saudi Arabia and OPEC

Saudis accepted the necessity to shift from easy-to-get petrodollars to the hi-tech shares and other non-oil resources. In 2017 the Saudi budget revenues are estimated at almost $184.5 billion (692 billion riyals), while the budget deficit will reach $52.78 billion (198 billion riyals), $26.4 billion less than in 2016. Riyadh hopes to get more profit from oil thanks to high prices and to push up new Foundations. This year they have held their market share and nipped off the Russian part in Eastern and Central Europe. Saudi Arabia achieved the agreement within OPEC and stopped the glut on the markets. Good job! However, OPEC is wider and larger than the kingdom. Libya and Nigeria have permission to drill and to send more oil to their customers. Iran will continue to produce black gold in order to reach the best level of its production after the sanctions.

Iran within OPEC

Iran is looking for new investors to develop its Yadavaran and North Azadegan oilfields. The oilfields are under Chinese supervision right now. Tehran is pushing China National Petroleum Corp to strengthen their activity in competition with other firms. Beijing has supported Iranians during the sanctions, but now Iranians would like to get more, forgetting the loyalty and partnership. Yadavaran and North Azadegan will flourish after the investment of $2 billion at least. So Tehran counts on additional 100,000 barrels per day from the oilfields. The OPEC cutoff program will begin in January 2017, while Iran plans to intensify the production.

Russia

Russians leaped up after the deal. Gazprom Neft will increase production by almost 5% in 2017. Rosneft attracts new admirers. Qatar Investment Authority and Glencore already purchased 19.5% of shares, Mubadala from the UAE appears to be interested. The interest is reasonable, because OPEC members will cut their output, so the best way to keep the income from the oil market is to get the part of the profits from other exporters. Why do the shareholders-to-be expect the earnings to be higher? There are three reasons for their expectations: Russians will pay to the Rosneft shareholders 35% of the net profit; the business is waiting for sanctions against Kremlin to be called off by Trump; the oil prices are growing from day to day in appreciation of the OPEC and non-OPEC good will.

Even Rex Tillerson from the Exxon Mobil would like to restart the project in Russian Arctic as soon as the Brave New World of healthy oil market will come true. Tillerson knows how to get money – other powerful leaders will watch him.

Israel

Israel made a step to become more involved in the international oil market. Delek Group has bought 13.2% of a North Sea oil and gas company. The company Faroe pumps Brent from North Sea and sells its shares by £99. Delek rose up to the first place among Faroe investors and is ready to enjoy the recovery of the oil markets. So Israelis believe in the continuation of the oil era at least for the next decade.

That how it works these days. Crude reaches $53.88, Brent jumps to $56.73. The world is not ready to reject the oil, to replace it by other sources of energy yet.

 


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