Source Pravda.Ru

Experts doubt OPEC will raise oil output quotas

The experts that RIA Novosti polled on Tuesday believe that OPEC is unlikely to increase oil output quotas.

Yevgeny Suvorov, an expert at Zenit bank, said, "at the meeting scheduled to be held in Beirut on June 3, OPEC will not increase oil production quotas. And if such a decision is made, it will be accompanied with an order to reduce oil output over and above the limit. So, this fact will not have any influence to speak of on the market."

Mr. Suvorov noted that the intention to raise quotas could doubtless have certain adverse effects on the market but the negative element will not be sizeable because, according to April statistics, OPEC produced about 2 million barrels of oil a day over the set limit.

Maksim Shein, the head of the analysis department of Brokercreditservis, also said that OPEC is unlikely to raise the quota for oil output.

"It is possible that the quota for oil output will not be increased at the coming OPEC meeting," Mr. Shein said. "The statement by Saudi Minister of Oil Industry Ali al-Naimi is populist and caused 'speculative gambling' on the market."

In Mr. Shein's opinion, high oil prices benefit independent producers and induce them to develop hard to develop deposits because high oil prices cover the primary cost extracting oil.

"Independent oil producers are raising oil output, which leads to increased demand and will result in reduction of the oil prices," he added.

Dmitri Lukashov, an expert at Aton, agreed with his colleagues.

"Everyone is satisfied with high oil prices, despite the different statements, and I think that in the short-term perspective oil prices remain at a sufficiently high level," Mr. Lukashov said.

All of the analysts noted that high oil prices benefit Russia. But, according to an expert, they could adversely affect the Russian economy in the long term because the additional revenues from oil export are not channeled into the development of the economy but are spent on meeting the state's current needs.

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