Output freeze not to eliminate market imbalance
The decision to freeze the oil output will not help eliminate the imbalance on the oil market, said a report issued by VYGON Consulting, an independent national advisor for Russia's energy sector.
It will just drop by around 0.5 million barrels per day as a result of increase in consumption and decrease of output in the U.S., said the report.
The VYGON Consulting analysts believe that in order to balance the market, OPEC should start to set quotas again and take more radical steps.
"In order to eliminate the excess, it is necessary to reduce the production by 0.5 million barrels per day with participation of Iran," said the report. "Otherwise, other OPEC countries, first of all Saudi Arabia, should reduce the oil output by 0.8 million barrels per day."
The analysts forecast that if there are no regulatory decisions in 2016, the market imbalance won't go away. However, it will decrease by around 1 million barrels per day in a year and stand at 1.06 million barrels per day, according to the report.
Doha hosted a meeting of oil producers on April 17 with participation of representatives of 7 countries. The meeting ended without an agreement.
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