Oil prices become the news number three these days. The first lines are occupied by earning reports for the Q1 and Central bank rates. The black gold of the global industry is climbing to the $50 per barrel. However, the point is still unreachable. WTI changed hands at $46.16 a barrel, close to a six-month peak of 46.78 hit on April 29. Brent from the North Sea melted to $47.74 a barrel; the highest since a six-month peak of 48.50 reached on April 29. Oil prices were supported by the fall of inventory level in the USA to 540 million barrels last week, instead of increasing to 714 million barrels according to forecasts.
To understand the trend of oil prices is necessary for recognizing the vector of the global economy. The main factors for the healthy oil market are decreasing of output and urgent attempts to kill off petrol slavery.
The decrease of the output is a fact in the USA, Canada, and Nigeria. The USA is surviving through the war against the technology for shale oil extraction, which has been initiated by Saudis in July 2014. The wildfire in the North Canada interrupted the production. The fire in the oil sands is expected to continue burning for months, declining the output. Notwithstanding the disaster, workers are ready to return to the rigs in Canada. As for Nigeria, the wave of violence causes the output to fall to 20 years low. An export terminal was attacked by a militant group Niger Delta Avengers in February. Since the attacks the terminal is still far from its best performance. Brazil and Venezuela slightly declined production, according to The Financial times. Russians are pessimistic about exploiting new oil field. On Friday Shell reported about more than 2,000 barrels of oil gushed into the Gulf of Mexico. Less oil at the market – high prices per barrel.
However, the Persian Gulf is still pumping “easy to get” oil matching demands of the globe. Saudi Arabia and Iran will never agree to cut the production struggling to protect their market shares. A new oil minister in Riyadh Khalid al-Falih replaced Ali al-Naimi as the Oil Kingdom reforms its ministries according to the long term strategy to release the state budget from the impact of the weak oil market and to create a new investment fund. Nevertheless, the new oil minister will continue the same policy of pumping and selling the oil for a penny.
As for petrodollars and “petrol lobby”, the most powerful companies are ready to produce some plastic goods instead of drilling. Exxon Mobile benefits in the Q1 thanks to its chemical plants, shifting the activity from researching and extracting oil. 74% of their earnings came from the chemistry! To kill off the petrol slavery is possible thanks to the alternative energy resources. New projects are coming on the avant-scene very soon. A new Tesla car is ready to replace old vehicles, sun batteries are conquering the world - give the world five years to change the face. We will be ready to replace petrol by the clean and green energy.