“Frozen” oil won’t allow tenge to devalue again?
Do Kazakhstan citizens have no worry about the devaluation of national currency against US dollar after the agreement between Russia and OPEC about the freezing oil production at the level of 11 January? Experts are estimating differently the influence of new agreement which involved Russia, Saudi Arabia, Qatar and Venezuela but refused by Iran and Iraq.
According to Sergey Kochergin, the financial analyst of EXNESS (Russia), “Frozen” oil will hold the price of oil above 31,64 dollars a barrel. Experts can exclude the scenario of falling prices till 10 US dollars per barrel of oil.
As noted in 365info.kz, If Russia and OPEC agreed to reduce the oil production by only 5% (that’s by 2,125 million barrels per day), it would wave disbalance between supply and demand in the oil market. In this case, oil prices would quickly return to the level of $45–50.
Reuters got the valuable opinions to this view of thinking. According to an American Agency, analysts of Deutsche Bank suppose that the OPEC agreement will have the weak impact on the world oil market.
“The conversation went from the reduction of oil production to freezing it in a particular level. The offer still depends on oil producers such as Iraq and Iran,” Deutsche Bank analysts noted.
The British Bank Barclays assumes that even if the agreement will be successful, an increase in prices for oil will be limited from which it can be led.
“The OPEC countries still faces a dilemma between higher prices of oil and a share in the market, They won’t be able to achieve both objectives,” Barclays noted the opinion.
The other experts said that the declared agreement was the first concrete step to limit production. Oil producing countries need to negotiate more to realize this agreement at all.
According to experts of Commerzbank, the positive realization of the agreement will depend on support from Iran and Iraq.
“When sanctions are removed, Iran got a chance to export oil at the level of 2,9 million barrels a day. At the present time, the main priority of Tehran is to return a market share which was lost because of the sanctions,” noted in the comment by Commerzbank.
What do we get as the result? Anyway, the world shouldn’t expect further reduction of oil prices. And the scenario of the national currency in the rate of 400 tenges per 1 US dollar doesn’t worry us for a while.