The current state of the world oil market

Abstract

The main issue of the world economy today is the global rise in oil prices. Oil remains the most important primary energy source in the world for the next 30-40 years. According to experts, by 2030 this figure will reach 116 million barrels per day. However, the share of OPEC countries in the world’s proven oil reserves is 83%. The world is facing the threat of a prolonged oil crisis and should be prepared for the fact that oil prices will be high for a long period.
OPEC expects an increase in demand for gasoline and distillates in 2018 by almost 1 million barrels per day. The optimism of the cartel is based on the growing demand for petroleum products in the US and the increase in global car sales. The healthy growth of the world economy, good sales figures for cars in recent months and increased consumption in the US will lead to an increase in demand for gasoline and distillates in the world by 0.993 million barrels per day. This will have a positive impact on oil and oil products stocks, which OPEC and non-OPEC countries seek to reduce by limiting production. The main driver of the reduction in petroleum products OPEC sees consumption in the US. For the first time in past 25 years, the demand for diesel fuel and gasoline in the US increased by 846 thousand barrels per day. The reserves of gasoline and distillates in the US declined over in 2017 and fell below the average for five years. Oil reserves also fell below this indicator.
Nowadays, OPEC continues to play a huge role in the functioning of the world economy, but it is clear that its role in the international arena is getting lower and lower every year. This is due to many indicators. Here are the main ones. First, due to the fact that already today OPEC is not able to cope with the fall in oil prices, it has to seek support from other oil-exporting countries, that is, its dependence on other countries increases. Secondly, the recent rationalization of the use of natural resources and the shift to the use of alternative energy sources, leads to a reduction in demand for oil. In these conditions, OPEC pursues a policy of reducing the production of oil. But, with the reduction in oil production in the OPEC countries, the states that are not included in it, on the contrary, are trying to increase production of «black gold», gradually reducing the role of OPEC in the functioning of the world economy.
The dynamics of energy demand is affected by many factors, including weather, the price of petroleum products, the growth rate of the economy, etc. The proposal is also difficult to calculate. Despite the very specific goals of the OPEC + countries and other exporters, there are periodic accidents, spills, man-made and natural disasters that can dramatically change the market situation. Many risks have to be neglected. IEA, OPEC and the US Ministry of Energy regularly publish their estimates of the future oil market and are the most authoritative organizations in this regard.
This article considers the dynamic of changes in the world market of «black gold», also many factors due to the influence of various geopolitical processes on extraction and export of oil.
Key words: oil, price, OPEC, petroleum, barrel.