OPEC's latest meeting decided to raise from November 1, 2004 the quotas on oil output by 1 million barrels per day to 27 million barrels. Meanwhile, the price range of $22-28 per barrel still remains unchanged.
Expert with the Financial Bridge investment company Stanislav Kleshchev believes that despite the new increase of quotas, world oil prices shouldn't be expected to drop until the end of the year. "I believe that oil prices will stay at the level of $40 per barrel," the expert believes.
According to him, oil output will not increase in actual fact because "everyone knows that the OPEC member states have already involved all their capacities."
"The OPEC exceeded the previous quota by 1 million barrels. The current quota increase reflects the current level of oil production," Kleshchev says.
In the opinion of Dmitry Tsaregorodtsev, an expert with Interfin Capital company, OPEC's latest decision is actually a formality.
"This decision has been taken, in particular, to remove the psychological factor linked with the Yukos case because it is not known what will happen to Yuganskneftegaz, which produces 800,000 barrels per day. If the situation with Yukos comes to normal and does not affect oil deliveries, oil prices can be expected to drop by about $5 per barrel," Tsaregorodtsev believes.
Expert of Metropol investment company Yevgeny Sotskov also considers it hardly probable that the increase of oil output quotas will have a considerable effect on oil prices.
"Market operators are more concerned over whether the OPEC countries will be able to find additional capacities because OPEC no longer has large production reserves," Sotskov says.
OPEC's decisions are declarative and aim to alleviate market over-excitement," he believes.
In the opinion of Sotskov, oil prices can be expected to drop a little in the short-term perspective. "However, I believe that prices will be at the level of $38-40 per barrel at the end of the year," the analyst added.
"The OPEC member states are maximally using their production capacities and any real increase in oil deliveries can hardly be expected," expert with Zenith bank Yevgeny Suvorov says.
He agrees with his colleagues that OPEC's decision will not have any considerable influence on oil prices. Oil prices will be at the level of no less than $35 per barrel at the end of the year," Suvorov believes.
