Predicted a significant decline in the share of oil in global energy balance

Minister of energy of the Russian Federation Alexander Novak believes that the share of oil in global energy balance will be significantly reduced, yielding renewable. This opinion was expressed today during the online conference the World energy Council and the Fund Recongress.

“We, of course, obviously, will experience a change in the structure of the energy sector”, — quotes “Interfax” the Minister.

According to him, “those predictions that were made earlier on the global energy development will be significantly adjusted”. “This concerns, first and foremost, lifestyle changes: less, I think, will be our citizens of the planet in the near future to travel by road transport, on air transport, the recovery is not so fast,” — said the Minister.

we also Recall, at the end of may he predicted that the world oil market could balance out in June—July of this year due to production cuts in OPEC, other producing countries, as well as the recovery of demand. As stated by Novak, oil demand in may is starting to improve and he’s already 20% higher than in April.

on 8 June, the Minister explained that the major countries-producers have teamed up in order to “balance supply and demand was achieved in a managed way”. However, he pointed out that all countries are interested in high rates of recovery in the economy and oil demand to the level that preceded the introduction of restrictive measures in connection with the spread of coronavirus infection COVID-19.

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 spread of coronavirus infection COVID-19 (March 11, was declared a pandemic) and fears for povodo 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 Novak, if necessary, the parties to the transaction can take additional measures to stabilize the situation on the market.

on June 6, the member countries of OPEC+ extended on a month — until the end of July — the period of validity of the agreement to reduce oil production to 9.7 million barrels per day.

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