On Monday, August 10, trading on the global energy market is accompanied by an increase in world oil prices. In the second half of the day, the cost of Brent crude on the ICE exchange grew by more than 1.5% - to $ 45.25 per barrel. At the same time, prices for American WTI oil increased by almost 2.5% - up to $ 42.31 per barrel.  

According to analysts interviewed by RT, market players respond positively to the actions of the countries participating in the OPEC + deal. Recall that on May 1, the members of the agreement resumed their partnership and cut oil production to combat the global surplus of raw materials. From May to July, hydrocarbon production in the cartel countries decreased by 9.7 million barrels per day compared to the level of October 2018. Since August, the states have agreed to slightly soften the restrictions - up to 7.7 million barrels.

“Moreover, on the eve of Iraq, as one of the members of the OPEC + deal, announced its intention to reduce oil production by 1.25 million barrels per day, i.e. in excess of the quota under the agreement. Now investors have begun to receive real signals from exporters that they are ready to take decisive measures to keep prices at a comfortable level for them. If the countries continue to follow the restrictions, then it is highly likely that the trend for an increase in quotations will become long-term, "said Artyom Deev, head of AMarkets, in a conversation with RT.  

At the same time, one of the key factors in the growth of oil prices was data on the global decline in drilling activity, experts say. According to a report by the oilfield services company Baker Hughes, 1,030 drilling rigs were operating in the world in July, compared to 2,238 a year earlier. Moreover, the wells were frozen both in the Middle East and in the countries of the Asia-Pacific region and Europe.  

The sharp decline in drilling activity in the world is largely due to the consequences of the COVID-19 pandemic. Some corporations froze investments in the development of new fields. Igor Yushkov, a leading analyst at the National Energy Security Fund, expressed this point of view in a conversation with RT.  

“Also, a number of enterprises were unable to survive the period of low oil prices and launched bankruptcy procedures, which was the impetus for a record reduction in drilling rigs. Moreover, investors, fearing a return of negative quotes for raw materials, stopped investing in production, which is why small companies lost their last source of funding. Now, the development of the industry will largely depend on large conglomerates, which will start buying up a part of the deposits at attractive prices, ”the expert emphasized.  

At the same time, the US shale companies are in the most difficult position, experts say. According to Haynes & Boone, 215 energy companies went bankrupt in North America between early 2015 and Q1 2020. 

As a result, since the beginning of the year, the number of rigs in the country has halved, and drilling activity has weakened to a minimum since the 1940s. Senior analyst of the information and analytical center Anna Bodrova told about this in an interview with RT.  

“There are just over 250 installations in the United States, which is a record low in the entire history of the industry. For American shale companies, current prices are considered unprofitable, since the cost of raw materials is more than $ 45 per barrel. At the same time, the majority of enterprises approached the oil recession with a mass of debts, the total amount of which exceeds $ 86 billion. In such conditions, it is likely that the number of drilling rigs in the country will continue to decline, ”the analyst predicts.   

In general, the surveyed experts expect that the general decline in drilling activity in the world with an increase in demand for hydrocarbons will benefit oil prices. In their latest report, OPEC economists have improved their forecast for demand for raw materials in 2020. According to the cartel's estimates, by the end of the year, the consumption of energy raw materials in the world could be reduced by 8.95 million barrels per day - up to 90.72 million barrels per day. Previously, analysts had expected a decline of 9.08 million - to 90.59 million barrels per day.  

“Investors see that with the growth in freight and passenger traffic in the world, demand for energy is increasing. This increases the risk appetite of the players. Under the current scenario, the price of raw materials may rise to $ 60-70 per barrel in the near future, "Freedom Finance analyst Yevgeny Mironyuk said in a conversation with RT.  

At the same time, already in the fall, oil quotes will begin to experience certain pressure associated with investors' fears about the start of the second wave of COVID-19, Igor Yushkov said. According to the expert's forecasts, some countries will most likely return some quarantine restrictions, therefore, by the end of 2020, oil may gain a foothold at $ 50 per barrel.