When oil prices go up: forecast

In the 1990s, Russia's industry was virtually destroyed, and the main source of income for the country's budget was oil. This situation has long been referred to by experts as an "oil needle", as dependence on the sale of raw materials makes us vulnerable. In recent years, we have all felt it well. The problems in the world economy and politics have led to a drop in the cost of oil, and each of us asks the question: when will oil rise in price?

How the market is formed

First of all, let's answer the question: on what do fuel prices depend? The cost of any product depends on supply and demand. If a product is required in small quantities, but produced in large quantities, the price of it will inevitably fall - one must somehow sell the product. Oil is used in production, so the demand for it depends on the general state of the world economy. In recent years, not just a stop has been observed, but a slight drop in the level of industry, fuel is required less, and the offer has not simply not fallen - it has grown because of the policy of Saudi Arabia. The supply exceeds demand, so the price has fallen. It would seem that the answer to the question of when oil will rise in price is very simple: when production will grow. But there are other factors.

Subcategory games

The cost of hydrocarbons depends largely on politics. It's no secret that the West has always looked with envy at Russia's vast resources, and for a long time now work has been done to weaken the country so that it's possible to cut a piece of this pie. The so-called "oil needle" is Russia's weakest point, so the West decided to hit precisely the hydrocarbon market. How did the oil fall? Previously, the amount of its production and prices were regulated by a special organization - OPEC. However, a couple of years ago the system "broke down". Saudi Arabia and the US sharply increased production volumes, demand grew. The goal is simple - to capture the market with the help of dumping. Around the same period, problems began with the economies of China and Ukraine, which led to a drop in demand. Now the answer to the question of when oil will rise in price has expanded:

1. When the countries that are part of OPEC, agree with each other, realizing that the fall in raw material prices hit everyone.
2. When the world economy goes into growth (here, hope is primarily for China).

Exchange Players

The cost of oil is affected by expectations. All raw materials pass through the stock exchange, and, according to experts, pricing here is very subjective. If there is a rumor that Saudi Arabia will decide to cut production, and if market players believe it, then they will start buying oil in large quantities in the hope of rising prices. Due to this artificially created demand, the cost and truth will begin to grow. But if the players are confident that the situation will not improve, they will prefer not to risk and reduce the purchase of raw materials. As you can see, there is too much "if" to say when oil will rise in price, the forecast of prices for which a huge number of factors should take into account.

New discoveries

Science also can not say whether oil will rise in price. Scientists did not even come to a common opinion about what its reserves on the planet are! At the same time, more and more news is coming up about the development of alternative energy: wind and solar energy are being actively used, technologies have been developed that make it possible to produce gasoline from vegetable oil and electricity from decomposing garbage. While the level of development of such technologies is small, they are able to provide no more than 20-30% of the world's energy demand, but scientific research does not stop. When scientists make a breakthrough, and whether they commit it, it is impossible to say.

We should not forget about nuclear energy. In 2010, it has strongly surrendered its positions, but in large countries it is constantly building nuclear power plants capable of producing much cheap energy. This process is not yet very active, as nuclear energy is very dangerous, but work to find the least risky decisions is ongoing.

What to expect from the presidents

You can find many opinions of experts, but in reality no one can say exactly when oil will rise in price. Many argued that in 2016, its price will rise to 100, and even to 150 dollars, but everything turned out differently. World politics today is simply unpredictable. A simple example: when sanctions were imposed against Russia, the same experts claimed that the economy of our country would collapse. And it turned out differently: Europe suffered much more, as the level of its exports fell. For Russia, however, sanctions have become an impetus for the development of the economy. Today we observe curious changes in the foreign and domestic policies of many countries. In the US and Europe, in fact, there is a struggle between two courses: for cooperation with Russia and for confrontation with it. From the outcome of this struggle, it becomes clear when oil rises in price.

Eternal problems of the Middle East

In the news on federal channels , one rarely hears about the state of affairs in Iran, which is rather strange, because it depends on its economy when oil prices go up. With this country recently lifted the embargo, that is, its oil can now pour into the market. Of course, the restoration of industry will take some time, plus it is unclear what position Iran will take. On the other hand, the situation in Syria is slowly but surely improving. As is known, terrorists actively trade in raw materials, significantly understating prices for it, since this activity is illegal. Provided that Iran decides to support Russia, and the banned organization of IGIL will be destroyed, it will be possible to say that the time when oil will rise in price to $ 80 is not far off.

Politics of Russia

It should be noted that many attempts by the West to weaken Russia have failed because of the competent behavior of the government of the Russian Federation. In the conditions of falling prices for raw materials, we found new sales markets, significantly improved relations with the countries of the East and with some, albeit not the most important, European states. The coalition of Asian countries, where Russia entered, is slowly but surely strengthened, and, perhaps, in the near future it will be able to resist the West. In the domestic policy of our country there is also a change, but they are still smaller. There is a significant growth in agriculture, work is being done to support entrepreneurship, but significant investment in heavy industry and refining that could consume large amounts of raw materials has not yet been observed. Nevertheless, on the whole, the Russian economy is becoming more stable, which will lead, if not to a rise in the price of hydrocarbons, at least to a decrease in their dependence on them.

Let's try to make a forecast

What needs to be done to make oil rise in price? Yes, just continue the course laid down today. Perhaps we can say that if the Western countries do not accept any unexpected suicidal decisions, the cost of oil will grow, albeit not at a high pace. Judge for yourself:

1. The economy of Saudi Arabia has been significantly affected by price dumping.
2. Iran and Syria, most likely, will be on the side of Russia, as previously the West led them to decline.
3. European countries are looking for ways to overcome the crisis and build up the economy.
4. China has always been famous for its "economic miracles", plus it lifted restrictions on the birth of children. It can be expected that if the population does not rise if it does not raise the country's economy, then at least it will not let it fall even lower.
5. The production of shale oil in the US has always been a dubious enterprise, and today we see how its level is falling.
6. Asian countries have begun active cooperation and are looking for opportunities to conduct settlements without using the dollar.
7. In the Russian economy there is a reorientation, although still weak, for light industry and agriculture.
8. Alternative energy is not yet fully able to meet the needs of world industry.

And yet, perhaps, we should think not about what to do to make oil rise in price, but about how to get rid of the "oil needle". Whatever the forecasts and prices for raw materials, dependence on it will always make our economy weak and volatile, so the main thing today is not oil, but comprehensive development of industry and agriculture.