Russia’s largest oil producer, Rosneft, expects oil prices to average between $40 and $43 per barrel next year, and is preparing for such prices, Rosneft’s CEO Igor Sechin told TV channel Rossiya 24 in an interview broadcast on Monday.
Last week, Sechin was quoted as saying that the recent rise in oil prices was due to a weak dollar, instead of efforts by OPEC to combat the global crude supply glut.
Sechin’s oil price forecast is basically in line with Russia’s economic estimates from earlier this year.
At the beginning of June, Russia’s Economy Minister Maxim Oreshkin said that Russia was “actually ready to live forever at oil prices $40 or below,” as oil at US$40 is the current underlying key assumption of Russia’s economic policies.
A couple of weeks later, Bank of Russia Governor Elvira Nabiullina said that Russia’s central bank was keeping its oil price forecast for this year at US$50 per barrel, and still believes that the price of oil will drop to roughly US$40 in 2018-2019.
Russia is the leader of the non-OPEC nations that work together with OPEC to jointly curb production in an effort to draw down the global glut and lift oil prices.
The deal, however, has not worked as fast as initially expected, due to rising oil supply from the U.S. and from exempt OPEC producers Libya and Nigeria.
Last week, Russia’s Energy Minister Alexander Novak said that he had discussed another extension of the deal with his Saudi counterpart, Khalid al-Falih, at a meeting in Saint Petersburg earlier this year, noting that all options are on the table and no decisions have been made yet. Related: The U.S. Oil Patch Has A Serious Cybersecurity Problem
Over the weekend, al-Falih discussed the deal with his Venezuelan and Kazakh counterparts and also agreed to “keep all options open”, including an extension of the deal beyond March.
Early on Monday, oil prices were mixed, amid the possibility of a deal extension and fears of lower U.S. oil demand after Hurricane Irma. WTI was up 0.20 percent at US$47.68 at 10:20am CST, while Brent was down 0.30 percent at US$53.62.
By Tsvetana Paraskova for Oilprice.com
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