Deputy head of the Ministry of energy Pavel Sorokin considers a fair price equilibrium for crude oil in the range of $40-50 per barrel. This opinion he expressed in an interview with “Oil and gas vertical”.
At the same time, said the Deputy Minister, when oil fell in price below $20 per barrel, we can safely say that this price is speculative, according to “Rossiyskaya Gazeta”.
we will Remind, last week the Minister of energy of Russia Alexander Novak said that Russia is comfortable with oil prices at $50 per barrel. The Minister noted that “prices are too high is also bad, as it reduces energy demand, attracted into the industry ineffective investment creates a surplus and the formation of the next crisis”.
Novak also stressed that the energy Ministry is optimistic about the chances of recovery in oil demand in the world, but does not exclude the impact of new foci of spread of coronavirus infection.
Earlier, OPEC announced the June report, which predicted that oil demand in the world will decrease by 6.4 million barrels per day in the second half of the year and will gradually recover until the end of the year. “It is expected that world oil demand will decrease by 6.4 million barrels per day in the second half of the year compared with a decline of 11.9 million barrels per day in the first half of 2020, and a gradual recovery is expected before the end of 2020,” — said in the report.
the Cartel also kept its forecast for the fall of world oil demand in 2020 at the level of 9.1 million barrels per day.
OPEC stated that “pandemic COVID-19 had a negative impact on global economic activity, which excludes the growth in world demand for oil”.
we Add that since the beginning of this year on the global oil market rode several waves of falling prices for “black gold”. The negative situation caused by a whole complex of factors: a General overproduction of raw materials, a sharp drop in demand due to the rapid spreadniya coronavirus infection COVID-19 (March 11, was declared a pandemic) and concerns about its impact on the global economy and the collapse of the deal, OPEC+ (officially from April 1, but in fact, after fruitless negotiations of the countries-oil producers at a meeting on March 6 in Vienna). Just last circumstance was the trigger to the collapse in oil prices. Moreover, Saudi Arabia announced plans to increase production and lower oil prices. Later, the desire to lower the prices declared Iraq, Kuwait, UAE and Nigeria.
For the first quarter of 2020, the price of Brent crude fell by 65.6%, while WTI rose by 66.5%. And at the end of March the cost of June futures on Brent fell below $22 per barrel (to $of 21.72), that is, to at least March 2002, and the may futures for WTI to us $20.1.
on April 12 OPEC countries+ finally agreed on a new deal, joined by 23 States. The agreement will be valid for two years, from may 1, 2020 to may 1, 2022-th. In may—June this year, the production cuts will amount to 9.7 million barrels per day (from October 2018), then — until the end of 2020 — 8 million barrels, and 6 million by the end of April 2022. While Russia and Saudi Arabia base count will be 11 million barrels per day (of the Russian Federation in the first 2 months will reduce production at 2.5 million barrels per day). New business OPEC+ was a forced reaction of oil producing countries on the situation in the market and pressure from the United States. Overall, however, it does not cover the volume decline in world demand for the same in the market have accumulated huge reserves of raw materials. Nevertheless, assured the head of the Ministry of energy Alexander Novak, if necessary, the parties to the transaction can take additional measures to stabilize the situation on the market.
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