The overwhelming slate boom


Recently, we could observe some processes undermining the architecture of the world oil market settled in the last 15 years. Thus, So, by the middle of April, 2015 the world prices for oil established in the range of 62-65 dollars/barrel., thus in January the average price made 50 dollars/barrel. In the previous year, in April, 2014 oil was bargained, on average, at the level of 108 dollars/barrel. 

The decrease of prices is explained generally by change of the world oil market supply and demand balance: surplus of the product reduces naturally its cost. Additional factors for this process became the November decision of OPEC on refusal to reduce production quotas, and also the statement of the minister of oil industry of the United Arab Emirates about refusal of the emergency meetings convocation of OPEC or production decrease even if the price will fall to 40 dollars/barrel.According to one of versions, low oil price is purposefully supported by Gulf States (which, by the way, at the November meeting of OPEC lobbied quotas preservation) to torpedo the growing slate oil production in the USA. And Saudi Arabia, Kuwait and Iraq try to put the additional pressure upon quotations – these countries declared price reduction of $2–4 for barrel for consumers of Asia recently.

Besides, oil market development is affected directly by new oil production technologies, in particular, slate oil production growth in the USA. Slate oil represents the lungs of low-permeability oil breeds produced by of multiphasic hydraulic layer fracturing methods. Thus, there is a threat of environmental pollution because the boring solution contains more than 50 chemicals which can get to ground waters. Also high slate oil production cost should be marked – to $80 for barrel that is commensurable with oil prices of November, 2014. However, until more recent times the plans of slate oil export from the USA for 2015 were declared. Thus, production of slate oil fields in the USA increased only: so, in the State of North Dakota production of slates increased to 660 thousand barrels per day. Nevertheless, in the middle of the year the mistake in the Monterrey largest formation in California assessment was declared. And the "mistake" was mothing less than 96%: from 13,7 billion barrels to 600 million barrels. It also affected the total parameter about the country: slate stocks of the USA reduced twice – from 24 billion barrels to about 11 billion barrels. The situation with such an "exposure" of the "largest" slate field in the USA hurt the plans of the state for power independence of the country because an essential increase of oil "injections" volumes to the foreign market would be difficult for the USA. Thus, it is the White House will not be able to bring down essentially oil prices. The shadow of suspicion "falls" on Saudi Arabia that increased oil offer volume.

Also it is necessary to pay attention to refusal of China of the Arabian oil owing to the high cost of its delivery. However, the recently adopted “five years” plan should be taken into account, which includes the transfer of large industrial zones from economically developed regions to the depressive ones. These plans ignited China to  the purchase oil from Russia.

The last measure could increase significantly the position of our country on the world market. Analysts of Intesco Research Group are prone to consider that further oil prices will not decrease lower than 50 dollars/barrel, because not only Russian economy is  endangered but also social obligations insurance in the damping Saudi Arabia. 

The registered parameters are calculated by the analysts of Intesco Research Group based on official statistics.