News // Middle East and OPEC
U.S. dollar, not OPEC, driving markets, Russian oil boss says
08 September 2017 , 18:00Neftegaz.RU306
The value of the U.S. dollar is having more of an impact on oil markets than the OPEC effort to trim production, the head of Russian oil company Rosneft said on September 8, 2017.
Russia is a party to the effort and is cutting the most among non-OPEC members.
«The Americans are supporting their shale producers through the dollar's devaluation. I think that the effect of the dollar's devaluation is stronger than the OPEC deal,» Sechin told TASS.
The value of the U.S. currency has moved lower for much of the year.
The price for Brent crude oil, meanwhile, is about 10 % higher than on this date in 2016 at $54.6 per barrel.
U.S. shale oil operators, meanwhile, have become more efficient and able to produce more despite the historic low for crude oil prices, which were above $100 per barrel 3 years ago.
The 4-week average for total U.S. crude oil production is 9.3 million barrels per day, up 9.5 % from the same period last year.
Phil Flynn, a senior market analyst for the PRICE Futures Group, said in response to emailed questions, that Trump supported a strong dollar on the campaign trail, but appears to favor a weaker currency as president in order to support U.S. exports.
«The Russian are probably not happy the dollar is weak and giving us that edge in exports,» he said.
Flynn added, however, that Sechin's case «is very thin.»
When it was implemented in January, the OPEC-led effort was seen as helping to establish a $50 per barrel floor under the price of Brent.
Sechin added that not all of the OPEC members are participating in the effort.
Libya and Nigeria are exempt from the deal so they can steer oil revenue toward national security efforts.
A pending initial public offering for Saudi Aramco could be a major factor for the price of oil.
The IPO would make the company more interested in pushing for a higher price of oil, Sechin said.
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