27.03.2020, 12:33
Russian Ministry of Energy Estimates Impact of Coronavirus on Lower Oil Prices
Source: OREANDA-NEWS
OREANDA-NEWS. The fair price of oil for the market now is $ 45-55 per barrel, such a price is optimal for growing demand, but doesn't allow shale projects to grow. This opinion was expressed by Deputy Energy Minister Pavel Sorokin at a round table on the Valdai club’s oil market.
"In our opinion, the fair price that allows the market to function is now in the range of $ 45-55 per barrel. It doesn't allow expensive projects to grow, but at the same time it allows demand to grow stably", Sorokin said. According to him, without taking into account the influence of coronavirus, whose contribution to the price drop is estimated at $ 25 per barrel, the price of oil would have varied in this range now, while an increase in oil production reduction under the OPEC+ transaction could reduce this effect by only $ 5- 7.
The energy ministry took into account the likelihood of an early completion of the OPEC+ agreement, but did not expect oil prices to fall below $ 30 per barrel, the deputy energy minister said.
“We did a detailed analysis of the development of events before the negotiations. Including the one that materialized. We predicted that in the event of a breakdown in OPEC’s decision to increase production, the price could drop to $ 30”, he said.
"In our opinion, the fair price that allows the market to function is now in the range of $ 45-55 per barrel. It doesn't allow expensive projects to grow, but at the same time it allows demand to grow stably", Sorokin said. According to him, without taking into account the influence of coronavirus, whose contribution to the price drop is estimated at $ 25 per barrel, the price of oil would have varied in this range now, while an increase in oil production reduction under the OPEC+ transaction could reduce this effect by only $ 5- 7.
The energy ministry took into account the likelihood of an early completion of the OPEC+ agreement, but did not expect oil prices to fall below $ 30 per barrel, the deputy energy minister said.
“We did a detailed analysis of the development of events before the negotiations. Including the one that materialized. We predicted that in the event of a breakdown in OPEC’s decision to increase production, the price could drop to $ 30”, he said.
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