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There is a risk that oil prices could hit $100 a barrel soon because a lot of uncertainties currently exist in a very nervous and emotional market, Russia’s Energy Minister Alexander Novak told Russian radio station Business FM in an interview on Thursday.
Novak doesn’t rule out that oil prices could reach $100 a barrel, but noted that this won’t be good for the global economy, producers and consumers alike. The current uncertainties in the oil market, especially about how many Iranian barrels will be lost to U.S. sanctions, will persist for at least another month until the market gets some clarity on the Iran sanctions, Novak noted. Due to those uncertainties, the market is currently very nervous and emotional, and traders and other market participants could continue to make decisions based on those uncertainties and push prices higher, he said.
Asked about whether Russia and Saudi Arabia would raise production to ease concerns about supply and cool oil prices, Novak said that Russia has already reversed all 300,000 bpd of the cuts it had pledged in the OPEC+ deal and added another 100,000-bpd production in September.
Russia increased its oil production in September to a post-Soviet record high of 11.36 million bpd.
Saudi Arabia also raised production in September, Novak told Business FM.
In an interview with Bloomberg Television, the Russian minister also said that oil prices are currently influenced by the uncertainty with Iran, as well as falling Venezuelan production.
“Current levels may be a little bit high,” Novak said, commenting on the current price of oil.
The price range of $65 to $75 a barrel seems to be an acceptable level for both consumers and producers, and at the same time, that range ensures enough cash flow to the oil sector to reinvest and develop sustainably, the Russian energy minister said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.