OPEC and Russian decision to stabilize oil prices

Russia's agreement with a number of OPEC countries to freeze oil production at the January 2016 level will freeze prices, but will not contribute to their growth. According to the expert, the level of production at which the parties agreed to freeze production is close to the maximum. Most likely, this decision will help freeze oil prices at the current level, but not their growth.

Currently, the OPEC countries are discussing the issue of a possible freeze in oil production to stabilize the market situation. Russia, Saudi Arabia, Venezuela and Qatar have agreed to keep average oil production in 2016 at January levels if other producers join the initiative. Later, the Venezuelan oil minister said that this proposal was supported by Algeria, Ecuador, Nigeria, Oman, and Kuwait also agreed.

According to OPEC, oil production in Saudi Arabia, the largest producer and exporter of oil in the cartel, amounted to 10.23 million barrels per day in January. According to the cartel, oil production in Russia reached a new record level of 10.91 million barrels per day in December last year. The expert also suggested that due to the current market situation, oil production in the United States will fall, as well as other projects will be frozen. The profitability of many deposits is higher than current prices.

World oil prices are now showing positive dynamics, but the rise in prices is due to the statement of Alexander Novak that consultations on the countries joining the initiative to freeze oil production should be completed by March 1.