Oil prices might have bottomed in August 2015 and would now be in the starting blocks hovering around $50 per barrel for the WTI with as main target the end of the strong bearish trend started in summer 2014 when that same barrel was worth more than $100. OPEC Secretary General Abdalla El-Badri noted that thanks to a contraction in production from some non-OPEC producers and an uptick in demand growth, the oil market will be more balanced.
It means that not only the OPEC oil-producing countries (still) don’t envisage cutting their production but chiefly that accelerated rise in oil prices is unlikely as a result. Additional information confirmed such viewpoint. Despite the likely veto on behalf of the Obama administration, the House of Representatives strongly lobbies for the lifting of the ban of US oil exports and due to constant pressure, this lifting will take place in the long run, close-to-Congress sources affirmed. Kuwait says it will continue investing in the oil sector and Saudi Arabia considers building a new refining complex worth $20 billion in Yanbu.
Beyond statistics from China, Russia’s actions in Syria are the main catalyst for oil prices stabilization if not increase in the short and medium term. Several analysts mentioned that in addition to defending its Syrian ally Bashar Al-Assad, Russian President Vladimir Putin also seeks to boost oil prices through military action and hopes to settle Russia durably in the region with a view to calling OPEC – particularly Saudi Arabia – for mutual understanding, namely that oil prices shall not stay so low so long.