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Russia Keeps 2018 Brent Outlook In The $50-$60 Range

Gazprom neft

Russian Minister Alexander Novak does not plan to change his 2018 barrel price outlook currently at the $50 to $60 level, according to a new report by TASS.

"My outlook is unchanged, my estimations for average [oil] price for 2018 have always been between $50 and $60 [per barrel]," Novak said. April 2018 deliveries for Brent oil futures currently cost $62.34 a barrel, but the minister’s range refers to the yearly average.

Since the start of the OPEC-Russia production cut deal, Russia’s oil companies and government have received the equivalent of around $41.5 billion more in proceeds, thanks to the higher oil prices, Novak said on Tuesday.

Russia is cutting 300,000 bpd as part of the pact with OPEC, and although there have been voices and speculation that some Russian companies are unhappy with the agreement that hampers their production expansion plans, Moscow has been keeping its end of the deal so far.

“Let me say once again, our task is not to mechanically raise prices,” Novak said in an interview with TASS last year, continuing: “We are to keep the market in balance. Prices are a derivative. In the autumn of 2016, oil was trading at $27 per barrel, but it may well have slumped to $15. This is not exactly what one would call a fair price, though. Oil market profiteers deliberately went bearish and opened many short positions. Far more than usual, as their aim was to push prices down as low as possible with the goal of eventually skimming off the cream.”

U.S. production is beating previous growth expectations, while minister Novak said in an interview with Russian news agency Interfax published on Monday that the goal of the OPEC-Russia deal in bringing the oil market back to balance had been two-thirds achieved.

By Zainab Calcuttawala for Oilprice.com

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