Oil prices in the summer were under the influence of the concentration of OPEC to production rather than to the price, and of the elasticity of US manufacturing. So the market remained under pressure from constant oversupply. In late August a strong additional impetus given concern about a steep "landing" and the Chinese economy. The result was - an escape from all possible risk positions, which deepened price decline in oil prices.
So weak economic growth has become the basic reason for the low prices. Christine Lagarde, said yesterday that the IMF will revise further down expectations. The huge level of indebtedness among US producers, together with the high dollar and expectations of higher interest rates do not add optimism. Each month the volume of production in the US fell.
According to analyzes of BNP Paribas low prices create and outlook by the elasticity of demand to the price of the US market. Analysts combine models with removal of sanctions against Iran and the current strategy of OPEC against mining. The trend that emerges is to constantly reduce capital expenditures and OPEC showed firmness in its intentions to discard market producers with higher costs. BNP Paribas predicts natural reduction of supply from producers outside OPEC to create a more optimistic sentiment in the oil market. The synergistic effect of all these factors, according to analysts, will most likely occur in mid-2016.
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